Comparing Tax-Saving Fixed Deposits and National Savings Certificates for Five-Year Investments

Tax-saving fixed deposits (FDs) and National Savings Certificates (NSC) are popular five-year investment options in India offering tax deductions under Section 80C up to Rs 1.5 lakh annually. NSCs provide around 7.7% interest compounded yearly, while tax-saving FDs offer rates between 5.5% and 7.75%, varying by bank. Both have a five-year lock-in period, with NSC generally less liquid. Interest on both is taxable, but NSC interest is reinvested annually, potentially enhancing returns. Investors should consider interest rates, liquidity, and personal goals before choosing.