Post Office FD vs NSC: Lower Interest FD Yields More Than NSC! Understand Why

• Post Office FD (5-year) offers 7.5% interest, while NSC offers 7.7% interest.
• Despite a lower interest rate, a 5-year Post Office FD yields slightly more than NSC for a 500,000 rupee investment.
• NSC interest compounds annually, meaning interest is calculated 5 times over 5 years.
• Post Office FD interest is calculated quarterly, leading to 20 compounding periods over 5 years.
• The higher frequency of compounding in FD results in a greater maturity amount, proving compounding method is key.

Why It Matters: Compounding frequency, not just interest rate, determines higher returns in Post Office FD vs NSC.