As per the National Pension Scheme details, the NPS scheme offers two types of accounts. These include the default Tier I account and the voluntary Tier II account. You can open a Tier II account if you already have an existing Tier I account.
While Tier II accounts do not have a cap on withdrawals, you can only withdraw from Tier I accounts after the first three years. The withdrawal limit for such accounts is set at 25% of the total contributions, with a maximum limit of 3 withdrawals throughout the tenor. As against this, FDs come with a set lock-in period. You can withdraw the funds from the account, but only after shouldering a reduction in interest rate as a penalty.