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  • Fixed Deposit BYTES FROM OUR KITCHEN

    FD Vs NSC

    If you have cash and an investment choice to make, then NSC as well as fixed deposits are the two most popular financial tools. However, both these tools are beneficial in their own unique ways.

    National Savings Certificate or NSC is one of the primary savings scheme floated and held by the government of India. The scheme offers lucrative returns to customers and is a safe bet for people looking for a low-risk investment choice. On the other hand, fixed deposits are instruments offered by both private and public banks and even by other non-banking financial institutions too.

    Which financial tool should be preferred out of NSCs and FDs and why?

    Based on various parameters listed below, you can make a choice between which financial tool to opt for, fixed deposits or NSCs. Both these investment options have their pros and cons and their demand may vary depending upon customers preferences.

    • Rate of interest offered
    • NSCs

      Returns offered by NSCs are in the range of 8.5% - 8.8% which is comparable to what is offered by fixed deposit schemes of banks and NBFCs. However, interest rates on NSCs are calculated every six months and hence the effective rate of interest comes to around 8.78% - 9.00%.

      Fixed Deposits

      Fixed deposit schemes offer interest rates that vary with respect to the lock-in period. Apart from regular schemes, special and higher rates of interest are offered to customers. FDs allow almost accurate calculation of final returns if you know the rate of interest being offered by the bank on your deposit.

    • Lock-in period (Liquidity of cash)
    • NSCs

      Lock-in period for NSC schemes is either 5 years or 10 years. The rate of interest offered on 10 year term NSCs is greater than that offered on 5 year term. Some customers thus are not comfortable with such long lock-in periods and hence prefer to invest their money in fixed deposit schemes which offer higher liquidity than NSCs.

      Fixed Deposits

      Fixed deposit schemes offer interest rates that vary with respect to the lock-in period. Apart from regular schemes, special and higher rates of interest are offered to customers. Customers can choose deposit periods depending upon their convenience and the rate of return they are fine with. Even when fixed deposits are made for a specific tenure, the money can be pre-maturely withdrawn with or without paying any pre-mature withdrawal fee.

    • Applicable tax on returns earned
    • NSCs

      Returns earned from NSCs are exempt from income tax under section 80C of the Income Tax Act. This signifies that actual returns are even higher than those estimated. This makes NSC a good investment choice for customers who do not mind locking their money for longer periods.

      Fixed Deposits

      Returns earned on fixed deposits are taxable and hence actual returns might not be as high as quoted by banks. However, certain fixed deposit schemes like the tax saver deposit scheme offered by almost all major private and public sector banks, is a good scheme under which tax deduction under section 80D of the Income Tax Act, can be claimed.

    • Premature withdrawal feature
    • NSCs

      National Savings Certificate has this one major drawback of unavailability of premature withdrawal before the tenure of 5 or 10 years gets completed. Your NSC can only be withdrawn prematurely under the following three conditions –

      • On death of the holder
      • On forfeiture of scheme by some gazette government officer
      • When withdrawal is ordered by court of law

      Fixed Deposits

      Premature withdrawal of fixed deposits is allowed by almost all banks and NBFCs. This pre-closure, however, is charged a specific pre-mature withdrawal fee which depends upon the bank in which you have your fixed deposit account. Some banks do not charge any fee for withdrawing deposits prematurely.

    • Loan facility
    • NSCs

      National Savings Certificate are a great financial tool to use as collateral against secured loans. For loans such as car loans, home loans etc. banks expect customers to deposit some form of collateral as security against their loans. These are used to recover money in case customers default to pay off their loans. Financial instruments like NSCs, fixed deposit schemes and insurance policies make great collaterals.

      Fixed Deposits

      Fixed deposits too like NSCs are preferred by banks as collateral for obtaining secured loans. Fixed deposits with the same bank are even better when availing loans. These deposits are kept as security by banks so that in case a customer defaults in paying off his/her loan, banks are able to recover some amount of money through these deposits.

    • Safety of deposit amount
    • NSCs

      National Savings Certificate are financial instruments issues by the government of India and as such the safety of capital invested is quite high.

      Fixed Deposits

      Fixed deposits too like NSCs are quite secure. However, FD schemes by public sector banks are considered to be safer than those offered by private sector banks and NBFCs. Customers who are conservative with respect to their savings habit should opt for deposits offered by government aided banks rather than private banks.

    To sum up, it is safe to say that fixed deposits are financial instruments that offer not only great benefits but also flexibility to customers. Deposit schemes can be availed as per the convenience of customers. Their maturity period, premature withdrawal and denomination can be controlled by customers. On the contrary except for the amount of NSC, tenure and premature withdrawal is not by any means in the hands of customers. Any customer who wants to avail more liquidity should opt for fixed deposit schemes and should try levelling the tax return benefit of NSCs by opting for tax-saver deposit schemes.

    Fixed Deposit vs National Savings Certificate (NSC) Reviews

    • SBI Fixed Deposit
      "Good FD account"
      0.5 5.0/5 "Blown Away!"
      I have invested the fixed deposit with State bank of India. Since the branch is nearest by my home and they have given me a locker facility hence i have chosen the fixed deposit with SBI. Overall, I'm very much satisfied with the services with SBI.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jan 18, 2019
    • YES Bank Fixed Deposit
      "Fraud by Yes Bank"
      0.5 1.0/5 "Really Bad"
      Yes Bank has not credited Interest for my Fixed Deposit. On enquiring they gave me a story that the interest amount has been adjusted towards TDS. They have not provided credit entry for the interest and the debit entry for the TDS respectively.
      Was this review helpful? 2
      , bhopal
      Reviewed on Jan 11, 2019
    • ICICI Bank Fixed Deposit
      "Smart Investment"
      0.5 5.0/5 "Blown Away!"
      In ICICI fixed deposit interest rate is around 6.75% per annum, I opened the FD through online. I have invested Rs. 1 lakh they wont take any charges for the pre matured fixed interest. I believe the interest rate is good compared to the government bank.
      Was this review helpful? 2
      , yamuna nagar
      Reviewed on Jan 10, 2019
    • Kotak Fixed Deposit
      "Average service"
      0.5 3.0/5 "Satisfactory"
      I am having a Fixed Deposit account with Kotak Mahindra bank, they provide good services when compared to other banks. I get good interest rate in returns after the maturity period which is after 3 years. Customer support is average with Kotak Mahindra bank.
      Was this review helpful? 1
      , chennai
      Reviewed on Jan 10, 2019
    • HDFC Bank Fixed Deposit
      "Hassle free"
      0.5 5.0/5 "Blown Away!"
      I also have a fixed deposit account with HDFC Bank. The process to open this account is easy. I can do it online. They also offer a good rate of interest on the account. The bank has always been up to the mark to ban with. It is very convenient and easy.
      Was this review helpful? 3
      , noida
      Reviewed on Jan 09, 2019
    • IOB Fixed Deposit
      "Better Banking Experience"
      0.5 4.0/5 "Great!"
      I have invested a fixed deposit with Indian Overseas Bank. My wife has recommended me about this bank since she is working over there. I invested the money of Rs. 50000. I don't remember about the tenure period. Before 1 years, i have invested the money with them.
      Was this review helpful? 0
      , tiruchirapalli
      Reviewed on Jan 09, 2019
    • ICICI Bank Fixed Deposit
      "Good Deposit"
      0.5 5.0/5 "Blown Away!"
      I have invested a fixed deposit with ICICI. There is no reason for selected this bank. They have offered me a interest rate of 6.5% and there is no processing fee. I have invested the money 8 months before. This is a one year plan. I'm happy about the services provided by the ICICI for this account
      Was this review helpful? 1
      , thane
      Reviewed on Jan 04, 2019
    • Corporation Bank Fixed Deposit
      "Average"
      0.5 4.0/5 "Great!"
      I had account with Corporation Bank and its very old one. I put fixed deposit before 3 to 4 years. The interest rate was around 7% which was minimum compared to others but am satisfied. I have deposited for 5 years. Actually have not taken any benefits, just have invested. The customer service was okay.
      Was this review helpful? 3
      , pune
      Reviewed on Jan 04, 2019
    • HDFC Bank Fixed Deposit
      "Good service"
      0.5 4.0/5 "Great!"
      I do have a fixed deposit account with HDFC Bank. They are giving good interest. I can manage this account on line. I have chosen HDFC because of bank financial is good. I have just started long time, The process was very quick and it was done through on line.
      Was this review helpful? 4
      , thane
      Reviewed on Jan 02, 2019
    • SBI Fixed Deposit
      "Best Investment plan"
      0.5 5.0/5 "Blown Away!"
      I have taken fixed deposit account in State Bank Of India . They are not charging any charges for the account . I used to get income tax benefits . Am satisfied with the customer service and response.They are giving good rate of interest . Overall am happy with my account .
      Was this review helpful? 4
      , ahmedabad
      Reviewed on Dec 29, 2018
    • review Fixed Deposit
      "Good online features on FD"
      0.5 5.0/5 "Blown Away!"
      In Saraswat bank they are providing the interest around 7% per annum, the minimum amount Rs. 5000 to max, still my FD is running with this bank. The online options are excellent without visiting I can track the interest and deposit amount through online.
      Was this review helpful? 1
      , pune
      Reviewed on Dec 17, 2018
    • HDFC Bank Fixed Deposit
      "Convenient FD with HDFC"
      0.5 5.0/5 "Blown Away!"
      In HDFC I can deposit for minimum of Rs. 5000 to max amount. I done the investment of one time payment around Rs.6 lakhs. I can chose the tenure period based on the convenient, it gives the interest of 7% its maximum. I can open and close the account through online.
      Was this review helpful? 6
      , pune
      Reviewed on Dec 17, 2018
    • SBI Fixed Deposit
      "Very Good Service"
      0.5 4.0/5 "Great!"
      I had made this investment pretty long time back and the services which they had provided so far has been good. The interest rate with them has been good and the growth with the investment has also been good. Their customer support has been helpful in guiding with everything.
      Was this review helpful? 9
      , bangalore
      Reviewed on Dec 14, 2018
    • YES Bank Fixed Deposit
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      It has been a good service which they had been providing so far and i had started this investment a log time back. Their customer support has been helpful in guiding me in the investment plans and explaining with the growth of the investment. The interest rate with them has also been good.
      Was this review helpful? 4
      , bangalore
      Reviewed on Dec 14, 2018
    • Citibank Fixed Deposit
      "Not satisfied with the service"
      0.5 1.0/5 "Really Bad"
      I had started this investment a pretty long time back and they had been providing a good service. Their customer support has not been responsive and i do not suggest any one to make an investment through them. There has not been a good growth with the investment.
      Was this review helpful? 1
      , bangalore
      Reviewed on Dec 14, 2018
    • SBI Fixed Deposit
      "Good Investment Plan"
      0.5 4.0/5 "Great!"
      I have taken fixed deposit account in STATE BANK OF INDIA . They are not charging any charges for the account . I used to get income tax benefits . Am satisfied with the customer service and response.They are giving good rate of interest . Overall am happy with my account .
      Was this review helpful? 4
      , mumbai
      Reviewed on Dec 12, 2018
    • Post Office Fixed Deposit
      "Good investment plan"
      0.5 5.0/5 "Blown Away!"
      I have started investing in the fixed deposit almost more than 5 years. I have invested a variable amount in different times. They have offered me a interest rate of 7.5%. The response was good. I have chosen the post office because of the safe and security.
      Was this review helpful? 14
      , guwahati
      Reviewed on Dec 12, 2018
    • YES Bank Fixed Deposit
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have the fixed deposit account with the Yes bank and the interest rate they have given me is good, also the customer service is good too they have co-ordinated with me well they time to time update me about there date of pay my next fixed deposit date.On line banking services are fine one too and am really happy with them.
      Was this review helpful? 0
      , ahmedabad
      Reviewed on Dec 11, 2018
    • Axis Bank Fixed Deposit
      "Average bank to avail fixed deposit"
      0.5 4.5/5 "Excellent!"
      I have chosen the Axis bank for my fixed deposit. I have deposited around of Rs. 50000. Since they are providing very good services in their branch. They have offered me a interest rate of 6.5%. I put the money in 2015. I have visited their branch many times and the service is very much prompt. I had no issues with them.
      Was this review helpful? 2
      , hyderabad
      Reviewed on Dec 11, 2018
    • ICICI Bank Fixed Deposit
      "Satisfactory"
      0.5 5.0/5 "Blown Away!"
      My fixed deposit is with ICICI Bank. I had to go to the bank and meet the executive and open the account. I can close the account online. There is a lock in period for 12 to 13 months. The interest I earn is satisfactory. I have a deposit of 70K. Overall good.
      Was this review helpful? 1
      , new delhi
      Reviewed on Dec 07, 2018
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