FD vs Small Savings: Which Investment Offers More Profit and Why?

• Fixed Deposits (FDs) and small savings schemes (PPF, NSC, KVP, SCSS) are popular low-risk investment options.
• Small savings schemes generally offer higher interest rates (6.7%-8.2%) compared to FDs (6.25%-6.40%) from most banks.
• Small savings schemes have lock-in periods (e.g., NSC 5 years, PPF 15 years), making FDs more suitable for short-term goals.
• Interest on FDs is taxable per income tax slab, while interest on many small savings schemes (like PPF, NSC) is tax-exempt.
• Experts recommend a balanced portfolio combining FDs and small savings schemes to meet different financial goals and timeframes.

Why It Matters: Choose between FDs and small savings based on interest rates, lock-in periods, tax benefits, and financial goals.