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Which is Better? National Saving Certificate Or FD

Posted on the 27 October 2020 by Tbfansource @tbfansource

Investments have become a common way through which people deal with their money. Thereby, there are a number of investment options out there that are available for potential investors. However, amongst all, NSC or National savings certificate and fixed deposits are the most common investment tools wherein people prefer to pool their funds in. NSC or National savings certificate is a savings instrument regulated by the Government of India. In the NSC, the depositors can make an investment through savings bonds. The fixed deposit on the other hand is an investment option, where the depositor deposits his money with the bank or post office and is rewarded with an interest in return.

Both these investment products allow people to avail tax deductions under section 80 C of the Income Tax. Further, both NSCs and FDs are offered by both Banks and post offices, thus, giving depositors a number of options to invest. However, when it comes to choosing one amongst the two, all investors should make a proper comparison of certain parameters. A comparison between NSC and fixed deposit is listed in the below-mentioned table, that highlights the features of both on certain common parameters.

On a concluding note, it must be understood that, when it comes to choosing one amongst the two the investor should make a decision based on his own discretion. Both NSC and Fd are safe and secure means to invest your money. However, both of them offer no liquidity, as funds can only be withdrawn after a lock-in period of five years. However, NSC can allow you to borrow a loan, a tax saving Fd won't allow a loan against it. FDs however, can provide you a high interest rate, in case the bank is providing a good Fd interest rate. When it comes to NSC v/s FD, both these investment schemes have their own advantages and disadvantages associated with it. The investor should thus make a comparison before choosing 'the best' for him or her.


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