Guest User
Welcome! Please login.
NCDs are issued by companies to raise capital from the public. These are fixed-income debt instruments whereas FDs or fixed deposits are held with banks.
| Basis | FD | NCD |
| Liquidity | Less liquid as you cannot redeem FDs before maturity. However, some banks allow pre-mature FD withdrawals at minor penalty charges. |
Liquid instruments as NCDs are tradable securities that can be bought and sold on the stock exchange. |
| Risk | FDs are comparatively less risky or safe and secure. | NCDs carry interest rate risks. |
| Taxation | Interest income on FDs is taxed as per the applicable tax slab rate. | Both the interest income and capital gain received, if you sell NCD before maturity are taxable. |
| Returns | Offer less returns upto 7% per annum. | NCDs offer 9%-10% returns per annum. |
| Tenure | Bank FDs can be done for relatively less periods say 1 year, 3 years, and 5 years. | NCDs have usually longer maturity periods. |