Whenever it comes to investing with saving tax, people often consider the option of tax saving Fixed Deposit (FD). Due to increase in interest on fixed deposits in the last 11 months, people’s interest in FD has increased.
However, if you are below 60 years of age, you can also consider a special post office scheme for higher interest. This scheme is National Savings Certificates (National Savings Certificates or NSC), in this scheme you are getting much more interest than Fixed Deposits.
7.7% interest is being received on National Savings Certificate
The government has increased the interest of National Savings Certificate by 70 basis points (0.70 per cent) for the April-June quarter of the year 2023. In the previous quarter, there was 7% interest on National Savings Certificates (National Savings Certificates or NSC). After the recent hike, the interest rate on National Savings Certificate has increased to 7.7%. Apart from this, 7.5% interest is being given in the post office term deposit of 5 years.
Banks giving 7% interest on tax saving FD
Most popular banks like HDFC Bank, ICICI Bank, Yes Bank, Axis Bank and IDFC First Bank are offering 7% interest on tax-saving fixed deposits. DCB Bank is paying the highest interest of 7.6% on 5-year fixed deposits. At the same time, IndusInd Bank is also offering an interest rate of 7.25% on fixed deposits of the same tenure. According to an ET report, Bank of Baroda is paying 6.5% interest on 5-year fixed deposits, Canara Bank 6.7%, Punjab National Bank (PNB) 6.5% and State Bank of India (SBI) 6.5%.
Keep these things in mind before investing money in NSC
National Savings Certificate (NSC) is a post office savings scheme. You can invest a minimum of Rs 1000 in NSC. At the same time, there is no upper limit of investment. However, the scheme has a lock-in period of 5 years. Also, keep in mind that the interest rate on National Savings Certificates is compounded annually. On the other hand, compounding of interest rates in bank FDs is done on a quarterly basis, which gives a slightly higher annual yield. You can invest only up to Rs 1.5 lakh in tax saving fixed deposits.
Disclaimer: Here only the information about the performance of the stock is given, it is not an investment advice. Investment in share market is subject to risk and you should consult your advisor before investing.
