NSC vs FD — Which Gives Better Returns?
NSC at 7.7% for 5 years gives ₹1.45 lakh on ₹1 lakh. A 5-year tax-saving FD at ~7% gives ₹1.40 lakh. NSC wins on rate, plus accrued interest qualifies for 80C re-investment benefit each year.
Principal Invested
₹1,00,000
Interest Earned
₹44,903
Maturity Value (5 yrs)
₹1,44,903
NSC VIII Issue: 5-year lock-in, compounded annually but payable at maturity. Current rate: 7.7% p.a. Investment qualifies for deduction under Section 80C up to ₹1.5L.
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Common questions about NSC vs FD — Which Gives Better Returns?
Is NSC better than a 5-year FD?
NSC currently offers 7.7% vs typical bank FDs at 6.5-7.2%. NSC also has a unique tax advantage — accrued interest in years 1-4 can be claimed as an 80C deduction (deemed reinvestment). FDs offer premature withdrawal flexibility that NSC lacks.