Calculate Your NSC Maturity Amount
Important: The interest rate is fixed at the time of investment for the entire 5-year period. The rate is set by the government and can change for new investments. Always check the official website for the latest rate.
Your NSC Investment Growth
All About the National Savings Certificate (NSC)
The National Savings Certificate (NSC) is a popular savings scheme offered by the Government of India, which you can buy from any Post Office. It is designed for people who want a safe investment, a fixed and guaranteed return, and want to save on income tax. It's a simple, one-time investment that gets locked in for 5 years, making it a reliable tool for medium-term financial goals.
Key Highlights: Why Should You Invest in NSC?
- Guaranteed Returns: The interest rate (currently 7.7%) is fixed for the entire 5-year tenure. Your returns are predictable and not affected by market changes.
- Tax Savings: Your investment of up to ₹1.5 lakh per year qualifies for a tax deduction under Section 80C.
- Safe & Secure: It is a government-backed scheme, making it one of the safest investment options available.
- Low Entry Point: You can start with a minimum investment of just ₹1,000.
- Loan Facility: You can use your NSC certificates as security (collateral) to get loans from banks.
- Easy Accessibility: It can be easily purchased from any Post Office across India.
Who Can Invest in NSC? (Eligibility)
- Any single adult who is a resident of India.
- Up to 3 adults can invest together in a joint account.
- A guardian can purchase NSC on behalf of a minor (child).
- A minor who is above 10 years of age can also buy NSC in their own name.
- Important: Hindu Undivided Families (HUFs), Trusts, and Non-Resident Indians (NRIs) are not eligible to invest in NSC.
Investment Rules: How Much Can You Invest?
- Minimum Investment: You can start with as little as ₹1,000.
- No Maximum Limit: There is no upper limit on the amount you can invest in NSC. However, the tax benefit under Section 80C is only available up to ₹1.5 lakh per year.
- Multiples of ₹100: You can invest any amount in multiples of ₹100 (e.g., ₹1100, ₹5200, ₹10,500).
How Interest is Calculated and Paid
This is a very important and unique feature of NSC. The interest is compounded annually, but it is not paid out to you every year. Instead, it is automatically reinvested back into your NSC account. This means your money grows faster due to the power of compounding. The entire amount—your initial investment plus all the accumulated interest—is paid to you in a lump sum at the end of 5 years.
The Special Tax Benefits of NSC Explained
NSC offers a clever tax benefit on both investment and interest.
- Tax Benefit on Investment: The initial amount you invest (up to ₹1.5 lakh) is eligible for a tax deduction under Section 80C. This helps lower your taxable income for that year.
- Tax Benefit on Interest: The interest earned for the first 4 years is considered to be reinvested. This reinvested interest is ALSO eligible for a tax deduction under Section 80C (within the ₹1.5 lakh limit). This is a unique benefit not available in most other fixed-income products!
- Tax at Maturity: The interest earned in the final (5th) year is not reinvested, so it is added to your income for that year and taxed as per your slab.
- No TDS: There is no Tax Deducted at Source (TDS) when the NSC matures. You receive the full amount. However, it is your responsibility to declare the final year's interest income when filing your tax returns.
Can You Break an NSC Before 5 Years? (Premature Closure)
NSC has a strict 5-year lock-in period. Premature withdrawal is not generally allowed, except in very specific circumstances:
- On the death of the account holder(s).
- On forfeiture by a pledgee (like a bank) who is a Gazetted Government Officer.
- When ordered by a court of law.