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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 Even when fixed deposits are made for a specific tenure, the money can be pre-maturely withdrawn with or without paying any pre-mature withdrawal fee.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.

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    Fixed Deposit vs National Savings Certificate (NSC) Reviews

    • Karur Vysya Bank Fixed Deposit
      "Service is good"
      0.5 5.0/5 "Blown Away!"
      Rate of interest is little bit high compared to other bank hence i have chosen the Karur Vysya bank for my fixed deposit. I have invested the amount of Rs. 5 lakhs. They have given me a monthly interest rate of Rs. 4400. I have got a proper response from the bank. On the maturity date, i have submit the bond and get the cash.
      Was this review helpful? 0
      , chennai
      Reviewed on Jun 16, 2019
    • Indian Bank
      Indian Bank Fixed Deposit
      "Service is good"
      0.5 5.0/5 "Blown Away!"
      I have chosen the Indian bank because of its a Government undertaken bank. I have invested the amount of Rs. 5 lakhs. They have given me a interest rate of 4100 monthly basis. They won't charge for anything extra. I visited their branch and put the money and the employee response. I'm happy about the returns because i got the interest on monthly basis.
      Was this review helpful? 0
      , chennai
      Reviewed on Jun 16, 2019
    • SBI Fixed Deposit
      "Safe and secured"
      0.5 5.0/5 "Blown Away!"
      Being a middle class person definitely I think to invest my money that's the reason I chosen SBI fixed deposit because its safe and secured. I can deposit for long term, the online feature is great and I can open and close the FD account through netbanking.
      Was this review helpful? 2
      , kolkata
      Reviewed on Jun 13, 2019
    • ICICI Bank Fixed Deposit
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      I did a Fixed deposit in ICICI BANK for my kids because I got my salary account and also have opened separate account for my kids and wife on the same bank so its easy to do the payment and linked together. The interest rate is 6.75% moreover the options are very flexible, the locking period is like 1month , 3 months, one year,etc and even the online services are enabled. Whenever I have good amount on the account so go for FD on the selected month, the interest amount will be credited into account.
      Was this review helpful? 1
      , hyderabad
      Reviewed on Jun 11, 2019
    • Oriental Bank of Commerce Fixed Deposit
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I have Oriental bank Of Commerce Fixed deposit account ,I have not faced any difficulties so far on using this account .Customer service is also good so far .Each and every transaction will be safe and secure .There was no drawbacks faced so far .I am very much comfortable and easy going and completely satisfied with the service.
      Was this review helpful? 1
      , hyderabad
      Reviewed on Jun 06, 2019
    • Axis Bank Fixed Deposit
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I have a Fixed deposit account with Axis Bank. I have not faced any difficulties so far on using this account. The customer service is also good so far. Each and every transaction will be safe and secure .There was no drawbacks faced so far. I am very much comfortable in using this account.
      Was this review helpful? 1
      , hyderabad
      Reviewed on Jun 06, 2019
    • HDFC Bank Fixed Deposit
      "Good"
      0.5 4.0/5 "Great!"
      I done a Fixed Deposit account with HDFC BANK before 2 years and the rate of interest was good. I have withdrawn the money and its neither loss or nor profit. My money is safer and return is very low. There was no locking period and the executive is supportive.
      Was this review helpful? 0
      , mumbai
      Reviewed on May 30, 2019
    • HDFC Bank Fixed Deposit
      "Its Good"
      0.5 5.0/5 "Blown Away!"
      I had fixed deposit in HDFC for the amount of Rs.10,000 then I withdrawn in two months I got some interest. I went to the bank for account opening within few minutes they helped to open the account. There is no charges for pre matured liquidity fund.
      Was this review helpful? 1
      , hyderabad
      Reviewed on May 25, 2019
    • HDFC Bank Fixed Deposit
      "Good Returns from HDFC"
      0.5 4.0/5 "Great!"
      As per the guidance , I taken a Fixed Deposit in HDFC . This is one year plan and worth enough to take this plan in HDFC comparing with the interest rate . I am really happy with the better returns for my FD . I thought of continuing after one year also .
      Was this review helpful? 1
      , hyderabad
      Reviewed on May 13, 2019
    • HDFC Bank Fixed Deposit
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I am using HDFC Bank Fixed Deposit for the past 6 years ,using net banking is also good ,customer service is good .flexy deposit ,whenever required can take the amount and can deposit it later .There was no issues faced so far .The Banking service is good to me so far.I am satisifed with the banking service.
      Was this review helpful? 3
      , chennai
      Reviewed on May 13, 2019
    • Oriental Bank of Commerce Fixed Deposit
      "Trusted investment for the future"
      0.5 5.0/5 "Blown Away!"
      I have fixed deposit with Oriental Bank of commerce, they give interest rate around 7.5%when I was invested but I am not sure about current one. However there is no charges applicable for the fd maintenance, They have nice online banking to open or close the account and its a trusted one.
      Was this review helpful? 0
      , bangalore
      Reviewed on May 13, 2019
    • ICICI Bank Fixed Deposit
      "Have to be more quick in their procedure"
      0.5 3.0/5 "Satisfactory"
      I have Fixed Deposit with ICICI also which was matured earlier even it was a tax free accounts they are charging some amount. Before the financial year completion, i need to submit the document to income department to get my fund but the procedure is too long and I did not get the money. I had done investment of 1L and 0.50L which am unhappy. I would suggest them to provide the bills on time after this experience have stopped investing with them.
      Was this review helpful? 2
      , hyderabad
      Reviewed on May 12, 2019
    • HDFC Bank Fixed Deposit
      "Very much convenient"
      0.5 5.0/5 "Blown Away!"
      My all time favorite is Fixed Deposit which is secured and I can count the returns on evey month which am most comfortable. My family all have them are having in HDFC account, the manager is very friendly and rendering the service. Am doing investment since 2011 and their services are more good than the profit.
      Was this review helpful? 1
      , hyderabad
      Reviewed on May 12, 2019
    • Axis Bank Fixed Deposit
      "Convenient fixed deposit"
      0.5 4.0/5 "Great!"
      My fixed deposit was opened with Axis bank, I invested around Rs. 1 lakh for one year. If I want I can also extend the tenure. I believe the rate of interest is more than 7% for per annum. I can also track the fixed deposit through online banking its more simple.
      Was this review helpful? 5
      , thane
      Reviewed on May 04, 2019
    • HDFC Bank Fixed Deposit
      "Userfriendly FD experience"
      0.5 4.0/5 "Great!"
      I do have fixed deposit with HDFC, I opened it through online there is no locking period, while opening I have specified the maturity date. Minimum deposit start from Rs. 5000, they are providing 7.3% per annum. Its safe and secured to invest money with HDFC.
      Was this review helpful? 2
      , bangalore
      Reviewed on May 03, 2019
    • SBI Fixed Deposit
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I am having fixed deposit with State Bank Of India ,interest is good .The banking service is good so far .I have not faced any issues so far .Money will be safe on this account .Whenever need money can take and can deposit as well .The banking service is good and satisfied so far .Will get frequent update as well. I am satisfied with the overall service.
      Was this review helpful? 12
      , faridabad
      Reviewed on Apr 30, 2019
    • Canara Bank Fixed Deposit
      "Good nservice"
      0.5 5.0/5 "Blown Away!"
      I am having fixed deposit with Canara Bank ,interest is good .The banking service is good so far .I have not faced any issues so far .Money will be safe on this account .Whenever need money can take and can deposit as well .The banking service is good and satisfied so far .Will get frequent update as well.
      Was this review helpful? 1
      , faridabad
      Reviewed on Apr 30, 2019
    • Punjab National Bank Fixed Deposit
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      Iam having fixed deposit with Punjab national bank ,interest is good .The banking service is good so far .I have not faced any issues so far .Money will be safe on this account .Whenever need money can take and can deposit as well .The banking service is good and satisfied so far .Will get frequent update as well.
      Was this review helpful? 1
      , faridabad
      Reviewed on Apr 30, 2019
    • SBI Fixed Deposit
      "Can do better"
      0.5 3.0/5 "Satisfactory"
      SBI gives only 6.7% of interest for the fixed deposit, there is some charges applicable for the per matured liquidity amount. They take 1% from the paid amount, its not flexible as HDFC. The customer dealing is also average to resolve the queries.
      Was this review helpful? 6
      , delhi
      Reviewed on Apr 29, 2019
    • HDFC Bank Fixed Deposit
      "Flexible Fixed deposit"
      0.5 5.0/5 "Blown Away!"
      HDFC Is more convenient to open and close the FD through online, they give better interest as per the RBI around 6.8%. The online portal is easy to track the fixed deposit details, the help desk is good to handle the queries. I am very much happy with HDFC. I can take the tenure from three months to max tenure.
      Was this review helpful? 1
      , delhi
      Reviewed on Apr 29, 2019
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