NSC, FD, or Mutual Funds: Where to Invest 1 Lakh for 5 Years for Higher Returns?

• NSC offers approximately 7.7% annual compound interest, growing 1 lakh to 1.44 lakh in 5 years, with tax benefits under Section 80C and high safety.
• Post Office FDs yield around 7.5%, while bank FDs offer 6-6.5%; a 1 lakh Post Office FD can become 1.45 lakh in 5 years, but interest is fully taxable.
• Equity Mutual Funds can provide 10-12% annual returns over the long term, potentially growing 1 lakh to 1.75 lakh in 5 years, but involve market risk.
• NSC is ideal for safety, FD for safety and liquidity, and Mutual Funds for higher returns with risk tolerance.
• Consider risk, taxes, inflation, age, income, and financial goals before investing; consult a financial expert.

Why It Matters: Choose between NSC (safety), FD (safety/liquidity), or Mutual Funds (higher returns/risk) based on your financial goals.