Earn interest up to 7.95% p.a. by investing in a Bajaj Finance Fixed Deposit | Rated CRISIL AAA/ STABLE and [ICRA]AAA(stable)

Investment decisions require a deep understanding of the market in which you are willing to put your money. While we have several investment options at the moment such as gold, stocks, NSC, fixed deposits, mutual funds, and more, many investors are quite eager to know about FD vs NSC and their differences. NSC, or National Savings Certificates, are offered under the postal savings system of India and help you invest in government savings bonds. Fixed Deposits (FD), on the other hand, are provided by banks and NBFCs so that investors can earn interest on their deposited money over a fixed tenor.  

What are the Differences Between FD and NSC?

If you are planning to invest money in either FD or NSC, then it is important to have thorough knowledge about both of these traditional investment options to make a planned investment. While National Savings Certificates are backed by the Government of India, Fixed Deposits offer guaranteed, risk-free returns. NSC currently offers an interest rate of up to 6.8% per annum, as per June 2021 data; however, it has a lock-in period of 05 years. The returns on FD differ from one financial institute to the other but it’s typically in the range of 5-7%. Moreover, with an FD investment, one can opt for interest payout on a monthly, quarterly, half-yearly, and annual basis. Unlike NSC, Fixed Deposits offer flexible deposit tenors.

 

NSC too is completely risk-free; however, in comparison to mutual funds and other investments, Fixed Deposits are less risky, and are covered under Deposit Insurance and Credit Guarantee Corporation (DICGC) deposit insurance with a maximum sum insured of ₹5 lakh only (principal and interest).

Let us take a look at the comparison between FD vs NSC.

FD vs NSC: A Head-to-Head Comparison 

Features

Fixed Deposit (FD)

National Savings Certificates (NSC)

General

FDs are term deposits offered by banks and NBFCs.

NSC is an investment option offered by the Indian government

Tenor

FDs have a flexible tenor ranging from 12 and 60 months

NSC has a fixed tenor of 5 or 10 years

Rate of Interest

FD typically offers interest rates in the range of 5-7% (different banks have different FD interest rates)

Rate of interest on National Savings Certificates is dynamic. It was up to 6.8% in July 2021

Tax Benefits

Interest earned from fixed deposits is fully taxable. However, under Section 80C, a tax-saving fixed deposit (FD) account with a minimum tenor of 5 years allows taxpayers a deduction of ₹1.5 lakh per annum

NSC is exempt from income tax. You can claim a tax deduction of up to ₹1.5 lakh under Section 80C of the Income Tax Act, 1961

TDS

Applicable

Not applicable

Risks

The only risk that follows with Fixed Deposit investments is the chance of a bank going bankrupt or defaulting. However, FD accounts are insured by DICGC, and each depositor in a bank is insured up to a maximum of ₹5 lakh for both principal and interest amount

No risk associated with NSC investment as it is backed by the Government of India

Loan

Many banks and financial institutions offer loans against FD accounts. With Bajaj Finance FD, you can get a loan of up to 75 % of your FD amount

NSC accounts can be used as collateral to get loans

Which to invest in: FD or NSC?

Both Fixed Deposit and NSC are seemingly great options to invest your hard-earned money. However, investing in FD is quite simple in comparison as you have control over the investment. With Bajaj Finance FD schemes, you can start your investment journey with as low as ₹15,000. You can also leverage the benefits of flexible tenor and easy online application processes. Explore the variety of options and apply for a Bajaj Finance FD on Bajaj Markets, today!

FAQs

  • ✔️What is NSC?

    NSC stands for National Savings Certificate, which is an investment option launched by the government to encourage Indian citizens to save. It is a part of the India Post’s postal savings scheme.

  • ✔️How to buy NSC online?

    You can now invest in NSC online through the electronic mode (e-mode) provided by the government. You can purchase it at all public sector banks as well as ICICI, HDFC, and Axis Banks. All you need is a savings account in these banks or one with the India Post and access to internet banking. It can be bought by an investor for self, on behalf of a minor, or with another adult as a joint account.

  • ✔️How to check NSC certificates online?

    First, you need to have e-mode enabled for NSC to check certificates online. You need to have access to internet banking through which you will be able to check your NSC certificate online just like online Bank FDs or RDs.

  • ✔️Can I get tax benefits by purchasing NSC?

    NSC is exempt from income tax under Section 80C of the Income Tax Act, 1961. Thus, you get a tax benefit of up to ₹1,50,000 each financial year.

  • ✔️What is the difference between fixed deposit and NSC?

    Fixed Deposits are offered by banks and NBFCs, while National Savings Certificates are backed by the Government of India. FDs have a flexible tenor for deposits depending upon the bank, whereas NSC has a minimum lock-in period of 5 years.

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