SBI FD vs Post Office National Savings Certificate: Which investment option can offer higher returns on Rs 4,50,000, Rs 8,50,000 & Rs 12,50,000 deposit in 5 years?

Compare SBI Fixed Deposit vs Post Office NSC returns for investments of Rs 4,50,000, Rs 8,50,000, and Rs 12,50,000 over 5 years.

Shriti Aniraj | May 23, 2025, 02:31 PM IST

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SBI FD vs Post Office NSC: Choosing between SBI Fixed Deposit (FD) and Post Office National Savings Certificate (NSC) can impact your 5-year investment returns significantly. Both are safe and government-backed, but they differ in interest rates, maturity benefits, and tax savings. This comparison breaks down how much you can earn on investments of Rs 4,50,000, Rs 8,50,000, and Rs 12,50,000 under each scheme. If you're looking for a secure, tax-efficient way to grow your money, this SBI FD vs NSC guide is for you.

(Disclaimer: Don't consider this as an investment advice. Do your own due diligence or consult an expert for financial planning)

1/10

SBI FD vs Post Office NSC

When investing Rs 4.5 lakh, Rs 8.5 lakh, or Rs 12.5 lakh for 5 years, understanding which option — SBI FD or Post Office NSC — yields better returns is essential for smart financial planning.

2/10

Interest Rates: NSC offers higher returns

NSC Interest Rate: 7.7% (compounded annually, payable at maturity)

SBI FD Rate: Up to 7.05% for general public; up to 7.65% for senior citizens

NSC has a slight edge in interest rates, especially for long-term investors.

3/10

Maturity and Tenure

Both NSC and SBI FD offer 5-year tenure options.

NSC matures exactly after 5 years with compounding benefits.

SBI FDs can be chosen for 5 years, but interest payout options vary (monthly, quarterly, annually).

4/10

Returns Comparison: Rs 4.5 lakh investment

Post Office NSC: Rs 6,52,065 (Interest: Rs 2,02,065)

SBI FD: Rs 6,21,189 (Interest: Rs 1,71,189)

NSC gives Rs 30,876 more in returns over 5 years.

5/10

Returns Comparison: Rs 8.5 lakh investment

Post Office NSC: Rs 12,31,679 (Interest: Rs 3,81,679)

SBI FD: Rs 11,73,357 (Interest: Rs 3,23,357)

NSC provides ₹58,322 more compared to SBI FD.

6/10

Returns Comparison: Rs 12.5 lakh investment

Post Office NSC: Rs 18,11,292 (Interest: Rs 5,61,292)

SBI FD: Rs 17,25,525 (Interest: Rs 4,75,525)

NSC yields Rs 85,767 more, offering a substantial gain.

7/10

Tax Benefits: Section 80C advantage

NSC qualifies for tax deduction under Section 80C (up to Rs 1.5 lakh per year).

SBI Tax Saving FD also offers 80C benefits, but with a fixed interest rate of 6.5%.

For tax-saving, NSC's higher rate and compounding make it more lucrative.

8/10

Liquidity and premature withdrawal

NSC: Cannot be prematurely withdrawn unless under special conditions (death, court order, etc.).

SBI FD: Allows premature withdrawal with a penalty.

SBI FD offers better liquidity, but NSC enforces long-term discipline.

9/10

Safety and risk factors

Both NSC and SBI FD are government-backed, making them low-risk.

NSC is issued by the Government of India via the Post Office.

SBI is a PSU bank; FDs are insured up to ₹5 lakh under DICGC.

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SBI FD vs Post Office NSC: Which is better?

For a 5-year investment horizon, Post Office NSC consistently offers higher returns across all amounts (Rs 4.5L, Rs 8.5L, Rs 12.5L) than SBI FDs. While SBI offers more flexibility and liquidity, NSC is ideal for long-term, stable and tax-saving investments.

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