National Savings Certificate (NSC) is a fixed-income savings scheme guaranteed by the Government of India. It offers a fixed interest rate (currently 7.7%) compounded annually but paid at maturity. NSC qualifies for tax deduction under Section 80C up to ₹1.5 lakh per year. The minimum investment is ₹1,000 with no upper limit. Maturity proceeds are also taxable (except the principal is already deducted under 80C).

National Savings Certificate (NSC) is a government-backed fixed-income scheme available at all post offices. With a guaranteed 7.7% return and Section 80C tax deduction, it is a popular choice for risk-averse investors seeking tax-efficient fixed-income investments. Use the calculator above to see how your investment grows over 5 years.

NSC Maturity for Different Investment Amounts

Investment	Year 1 Value	Year 3 Value	Maturity (5yr)	Tax Saved*
₹10,000	₹10,770	₹12,492	₹14,490	₹3,000
₹50,000	₹53,850	₹62,462	₹72,452	₹15,000
₹1,00,000	₹1,07,700	₹1,24,924	₹1,44,904	₹30,000
₹1,50,000	₹1,61,550	₹1,87,386	₹2,17,356	₹46,800

*Tax saved assumes 30% tax slab. Interest earned on NSC is taxable. Rates at 7.7% p.a. compounded annually.

NSC vs Other Fixed-Income Options

Feature	NSC	PPF	Tax-Saver FD
Current Rate	7.7%	7.1%	6-7.5%
Tenure	5 years	15 years	5 years
80C Benefit	Yes	Yes	Yes
Tax on Interest	Taxable	Tax-free	Taxable

How to Calculate NSC Maturity

In plain words

NSC interest is compounded annually but paid only at maturity. The interest earned each year is deemed to be reinvested (similar to cumulative FD). The total maturity amount includes both the principal and the accumulated interest. NSC investments qualify for Section 80C deduction up to ₹1.5 lakh per financial year.

How the calculation works

A = P × (1 + r)^t

Where:
A = Maturity Amount
P = Principal (Investment Amount)
r = Annual NSC Interest Rate (currently 7.7% = 0.077)
t = Time Period (5 years)

Interest = A - P

Tax Benefit = min(P, 1,50,000) × Tax Slab Rate (under Section 80C)

A quick example

Let us calculate the maturity for a ₹50,000 NSC investment at 7.7% for 5 years:

Investment Amount:₹50,000

NSC Interest Rate:7.7% p.a. (current)

Tenure:5 years

Step by step

1.Year 1: ₹50,000 × (1 + 0.077) = ₹53,850
2.Year 2: ₹53,850 × (1 + 0.077) = ₹57,996
3.Year 3: ₹57,996 × (1 + 0.077) = ₹62,462
4.Year 4: ₹62,462 × (1 + 0.077) = ₹67,272
5.Year 5: ₹67,272 × (1 + 0.077) = ₹72,452
6.Interest = ₹72,452 - ₹50,000 = ₹22,452
7.Tax saved under 80C = min(₹50,000, ₹1.5L) × 30% = ₹15,000

So the answer is: Maturity Amount = ₹72,452 | Total Interest = ₹22,452 | Tax Saved = ₹15,000 (30% slab)

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Frequently Asked Questions

What is NSC and how does it work?

National Savings Certificate (NSC) is a government-backed fixed-income savings scheme available at all post offices. You invest a lump sum amount, and interest is compounded annually at a fixed rate (currently 7.7%). The maturity amount — principal plus accumulated interest — is paid after 5 years. NSC is a popular 80C tax-saving instrument.

What is the current NSC interest rate?

The current NSC interest rate is 7.7% per annum, compounded annually but payable at maturity. The rate is reviewed quarterly by the government. NSC has historically offered rates 0.5-1% higher than PPF.

Is NSC tax-free?

The investment up to ₹1.5 lakh per year is deductible under Section 80C. However, the interest earned is taxable as income from other sources. Unlike PPF (which is EEE — tax-free on investment, interest, and maturity), NSC is only EET — exempt at investment, taxable at maturity on interest.

What is the minimum and maximum investment in NSC?

The minimum investment in NSC is ₹1,000. There is no upper limit for investment. However, only up to ₹1.5 lakh per financial year qualifies for tax deduction under Section 80C.

Can I withdraw NSC before 5 years?

Yes, but with a penalty. Premature withdrawal is allowed after 3 years. The interest rate paid on premature closure is the Post Office Savings Account rate (currently 4%), and a small penalty may apply. No premature withdrawal is allowed in the first 3 years.