Compare NSC, SCSS, Monthly Income Scheme, Time Deposit and Kisan Vikas Patra on the same money and the same horizon, with eligibility limits and the effective annual return.
Why does NSC beat SCSS when SCSS pays a higher rate?
Because SCSS pays its interest to you every quarter, so it cannot earn anything more inside the scheme. NSC keeps the interest and compounds it each year. Over five years that compounding is worth more than the extra half point, unless you have somewhere good to put the quarterly payments. If you need the income to live on, SCSS is doing its job and the comparison is not the point.
What should I put as the reinvestment rate?
Whatever you would realistically earn on the payouts. Zero is right if you will spend them, and it is the default for that reason. If they would go into a savings account, use that rate. If into another deposit, use that. The figure genuinely changes which scheme wins, so it should be yours rather than ours.
Why is Kisan Vikas Patra usually shown as ruled out?
Because it runs for a notified doubling period of 115 months, which is nine years and seven months. If your horizon is shorter than that you would have to break it early, and it pays very little if you do. Extend the horizon past its term and it appears as a real option.
Are these rates fixed for the whole term?
For most of them, yes. The rate at which you open NSC, KVP, SCSS, the Monthly Income Scheme or a Time Deposit applies for that whole term, even though the government notifies new rates every quarter for new accounts. That is why the quarter shown on this page matters, and why you should confirm the current figures before opening anything.
Does this account for tax?
No. Interest from all of these is taxable at your slab rate, and TDS may apply. A senior citizen can set interest against the section 80TTB limit, which can change the ranking after tax. Use the interest tax page alongside this one before you decide.
Why compare on the total rather than the rate?
Because a rate on its own does not say when the interest arrives or whether it compounds, and those decide the outcome. The total you end with, and the effective annual return derived from it, are the only figures that let a monthly payout scheme and a maturity scheme be judged side by side.