NSC vs Post office FD vs SBI, HDFC Bank, and other bank FDs: Which of them can give you higher returns on Rs 5 lakh investment?

NSC vs Post office FD vs SBI, HDFC Bank, and other bank FDs: If you're an investor who prefers schemes with guaranteed returns, there's an attractive option that not only saves your income tax but also offers significantly higher interest rates than the tax-saving FDs of major banks like PNB and SBI. However, to benefit from these higher rates, you need to invest your money for a minimum of 5 years. Know about this scheme here-

Post Office Scheme: National Savings Certificate (NSC)

Let's refer to the National Savings Certificate (NSC) from the Post Office, a deposit scheme with a 5-year investment period. Currently, this scheme offers up to 7.7 per cent interest, a rate higher than what you'll find with 5-year FDs at leading banks like PNB, SBI, and HDFC.

NSC Calculation

Suppose you are investing Rs 5 lakh in NSC at an interest rate of up to 7.7 percent. In 5 years, you will earn Rs 2,32,124 as estimated returns. And after 5 years your total wealth will be Rs 7,32,124.

Interest Rates at SBI and PNB

At SBI, the 5-year Tax Saving FD offers an interest rate of 6.5 per cent for the general public and 7.5 per cent for senior citizens. PNB offers 6.50 per cent interest to the general public, 7.00 per cent to senior citizens, and 7.30 per cent to super senior citizens.

SBI FD Interest: Calculation
General Public: Suppose you, as a general public, are investing Rs 5 lakh in SBI FD, then you will get an interest rate of up to 6.5 percent for a tenure of 5 years. Over the years, you will earn Rs 1,90,210 as estimated returns. And after 5 years your total wealth will be Rs 6,90,210.

Senior Citizens: Suppose you, as a senior citizen, are investing Rs 5 lakh in an SBI FD at an interest rate of up to 7.5 per cent for a tenure of 5 years. Over the years, you will earn Rs 2,24,974 as estimated returns. And after 5 years your total wealth will be Rs 7,24,974.

PNB FD Interest: Calculation
General Public: Suppose you, as a general public, are investing Rs 5 lakh in PNB FD, then you will get an interest rate of up to 6.5 percent for a tenure of 5 years. Over the years, you will earn Rs 1,90,210 as estimated returns. And after 5 years your total wealth will be Rs 6,90,210.

Senior Citizens: Suppose you, as a senior citizen, are investing Rs 5 lakh in an PNB FD at an interest rate of up to 7.3 per cent for a tenure of 5 years. Over the years, you will earn Rs 2,17,891 as estimated returns. After 5 years your total wealth will be Rs 7,17,891.

Interest Rates at HDFC Bank, ICICI Bank, and Axis Bank

In the private sector, HDFC Bank provides 7 per cent interest to the general public and 7.50 per cent to senior citizens on a 5-year FD. ICICI Bank offers similar rates. Axis Bank offers 7 per cent interest to the general public and 7.75 per cent to senior citizens for a 5-year Tax Saving FD.

Post Office 5-Year Tax Saving FD

The Post Office also offers a 5-year FD with an interest rate of 7.5 per cent, which is still lower than the NSC rate. Like Tax Saving FDs, NSC investments also qualify for tax benefits under Section 80C.

Investment in NSC

To open an NSC account, you need a minimum investment of Rs 1,000, with no upper limit on the amount you can invest.