NSC or Bank FDs: Which Tax-Saving Option is Better for You?

National Savings Certificates (NSC) and tax-saving Fixed Deposits (FDs) help you save tax under Section 80C.

NSC Features:

• Offers a fixed interest rate, which grows yearly.
• Has a 5-year lock-in period.
• The interest is taxable, but you can claim a deduction (except in the final year).

Bank FD Features:

• Provides fixed interest, but the rate depends on the bank.
• Has a 5-year lock-in period.
• The interest is taxable, and banks deduct TDS if it crosses the limit.

Which One Should You Choose?

• Choose NSC for better post-tax returns.
• Pick Bank FDs for easier access and flexibility.

Both options have pros and cons. Your choice should depend on your tax-saving goals and how soon you need the money.