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Calculate the maturity value of a National Savings Certificate after the fixed 5-year tenure at the prevailing NSC rate.
Current NSC interest rate
7.7% p.a.
Set quarterly by Government of India
Tenure
5 years (fixed)
NSC has a non-negotiable 5-year lock-in
Maturity value
₹72,452
Invested
₹50,000
Interest
₹22,452
Year-by-year balance
| Year | Interest credited | Balance |
|---|---|---|
| Year 1 | ₹3,850 | ₹53,850 |
| Year 2 | ₹4,146 | ₹57,996 |
| Year 3 | ₹4,466 | ₹62,462 |
| Year 4 | ₹4,810 | ₹67,272 |
| Year 5 | ₹5,180 | ₹72,452 |
Interest is reinvested every year inside the certificate. You receive the full maturity value as a single lumpsum at the end of year 5.
The National Savings Certificate is a small-savings scheme sold at post offices across India. You hand over a principal amount, the post office issues a certificate that locks for 5 years at the prevailing NSC rate, and you receive the principal plus accumulated interest as a single lumpsum at maturity. NSC is backed by the Government of India, which makes it about as low-risk as Indian retail investments get.
Maturity = Principal × (1 + r)^5
The initial NSC investment qualifies for deduction under Section 80C, within the overall ₹1.5 lakh annual 80C cap.
NSC interest is technically taxable each year - but because it's reinvested back into the certificate, the reinvested portion is treated as a fresh 80C-eligible contribution in years 1-4. The effect: in those years the taxable interest is offset by a matching 80C deduction. Only the FINAL year's interest (year 5) is fully taxable with no offsetting deduction, because the certificate matures and the interest is paid out instead of reinvested.
All three qualify for 80C, but they suit different goals. NSC has a shorter 5-year lock vs PPF's 15 years, but PPF's interest is fully tax-free (NSC's isn't). Tax-saver FDs also lock for 5 years but their rate isn't government-set, and their interest is taxable each year WITHOUT the NSC reinvestment offset. If you specifically want a 5-year horizon with a sovereign guarantee, NSC is the typical pick.
NSC doesn't allow voluntary premature withdrawal. Encashment before 5 years is only permitted in narrow situations - death of the holder, forfeiture by a pledgee, or a court order. Plan the 5-year lock accordingly.
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