Differences between an NCD and FD: i) Liquidity: In contrast to an NCD, Fixed Deposits can't be sold in the market. As Non-convertible debentures are listed on a stock exchange, you can sell them any time you want. However, bank FDs(fixed deposit) are also highly liquid and can be encashed before maturity with minor penal charges. ii) Safety: While Non-convertible debentures are secured debt, corporate FDs are altogether unsecured and bank FDs are secured to the extent of Rs one lakh only. iii) Taxation: There is a difference in the taxation aspect also. In addition to interest income, there can be capital gains if you sell the Non-Convertible Debenture (NCDs) before maturity. However, unlike FDs, there is no TDS in case of Non-Convertible Debentures. iv) Interest rate risk: Unlike FDs(fixed deposit), Non-Convertible Debenture carries interest rate risk due to changes in market interest rates.