Which is better, NCD or FD?

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FDs typically have a fixed commitment period, and early withdrawal may be subject to penalties or lower interest rates. NCDs generally offer higher interest rates as they can be fixed or floating, while FDs have a fixed interest rate for the entire term.

Difference between NCD and FD

Aspect	Fixed Deposits (FDs)	Non-Convertible Debentures (NCDs)
Commitment Period	Short term to medium term. Typically have a fixed commitment period (e.g., 1 year, 3 years, 5 years)	Medium to long term. Have a specified maturity period, e.g., 1 year to 10 years.
Early Withdrawal	Early withdrawal may be subject to penalties or lower interest rates	Can be traded before maturity, if listed on a stock exchange. No penalty, trading happens at available market price.
Liquidity	More liquid than NCD. Can be withdrawn anytime subject to penalties	Less liquid than FD. Though listed NCDs can be traded, the liquidity is lower.
Interest Rates	Fixed interest rates for the entire term	Offer higher interest rates, which can be fixed or floating, depending on the terms
Regulatory Oversight	Regulated by the Reserve Bank of India (RBI) and governed by banking regulations.	Regulated by the Securities and Exchange Board of India (SEBI) and governed by securities regulations.

Which is better, NCD or FD?

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