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Bank FD vs. NSC: Which among these is the best, rick-free investment option with higher returns, know here
Bank FDs vs. NSCs: Secure investments with differing tenures and returns.
Updated : Jul 21, 2023, 03:57 PM IST | Edited by : Raunak Jain
 "Bank FD, National Savings Certificate, Investment schemes, Interest rates, Post office savings, SBI FD rates, HDFC Bank FD rates")
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Bank FD vs. NSC: When it comes to investing, the market offers various options, some with market risks and others that are more secure. Today, we'll focus on risk-free investment schemes, which are preferred by a significant portion of the population in our country. Two popular choices are Bank Fixed Deposits (FDs) and Post Office National Savings Certificates (NSC). Let's delve into the features and interest rates of both these schemes to help you make an informed decision.
Interest rates in top banks
Leading public-sector bank, State Bank of India (SBI FD Rates), offers interest rates ranging from 3.00 percent to 6.50 percent on FDs with tenures from 7 days to 10 years for the general public. Additionally, there's a special FD scheme for 400 days, providing an interest rate of 7.10 percent. HDFC Bank (HDFC Bank FD Rates) offers interest rates between 3.00 percent and 7.25 percent on FDs with tenures from 7 days to 10 years. Meanwhile, ICICI Bank (ICICI Bank FD Rates) provides interest rates between 3.00 percent and 7.10 percent on deposits.
Interest rates on National Savings Certificate (NSC)
The National Savings Certificate is a post office savings scheme offering a 7.7 percent interest rate from July to September. You can invest a minimum of Rs 1,000 in this scheme, and there is no maximum limit; you can invest as much as you want, in multiples of Rs 100.
Bank FD vs. NSC
While banks allow you to invest in FDs ranging from 7 days to 10 years, the NSC scheme has a fixed investment period of 5 years. In bank FDs, the interest rate can be received monthly or quarterly, whereas in the NSC scheme, it is transferred to the customer's account only upon maturity.
Another advantage of bank FDs with tenure of 5 years or more is that they qualify for deduction under section 80C of the Income Tax Act. This allows you to claim a deduction of up to Rs 1.5 lakh. Similarly, the NSC scheme also qualifies for the 80C deduction benefit.
By considering these factors, you can make an informed choice between Bank FDs and NSCs, ensuring your investment aligns with your financial goals and risk appetite.
