National Savings Certificate Calculator India 2025
Calculate Post Office NSC maturity amount, compound interest, and tax benefits for guaranteed returns with this free online tool.
Government Guaranteed
Compound Interest
Section 80C Benefits
5 Year Tenure
Post Office NSC Investment Details
Min: ₹1,000
₹
One Lakh rupees
₹1,000₹10L
Current: 7.7%
%
NSC interest rate updated quarterly by Government of India
5 Years (Fixed)
NSC has a mandatory 5-year lock-in period
Used to calculate tax savings under Section 80C and net returns after tax
Understanding National Savings Certificate (NSC)
National Savings Certificate (NSC) is a fixed-income savings bond offered by the Government of India through Post Offices across the country. Launched to promote small savings and provide investment options for retail investors, NSC combines the security of government backing with attractive interest rates and significant tax benefits.
Key Features of NSC
Fixed Tenure
NSC has a fixed maturity period of 5 years from the date of investment. Previously, 10-year NSC was also available but has been discontinued.
Guaranteed Returns
Current interest rate is 7.7% per annum, compounded annually. Rate is reviewed quarterly by the government.
Tax Benefits
Investment qualifies for Section 80C deduction up to ₹1.5 lakh annually. Interest for years 1-4 also eligible for deduction.
Low Minimum Investment
Start investing with as low as ₹1,000 with no maximum limit. Additional investments in multiples of ₹100.
NSC Compound Interest Formula
The NSC uses compound interest calculation where interest is reinvested annually
A = P × (1 + r/100)^nExample:
For ₹1,00,000 investment at 7.7% for 5 years:
A = 1,00,000 × (1 + 7.7/100)^5 = ₹1,44,781
= Interest Earned = ₹44,781
Variables:
A - Maturity Amount
P - Principal Investment
r - Annual Interest Rate (%)
n - Number of Years (5)
These formulas provide the mathematical foundation for the calculations. Actual results may vary based on rounding, compounding frequency, and specific lender policies.
Benefits & Features
Who Should Invest in NSC?
- Conservative investors seeking guaranteed returns with minimal risk
- Tax savers looking to maximize Section 80C deductions (up to ₹1.5 lakh)
- Long-term planners comfortable with 5-year lock-in period
- Small investors wanting to start with as low as ₹1,000
- Parents/Guardians planning for children's education or marriage
Who Should Avoid NSC?
- NRIs (Non-Resident Indians) - not eligible to invest in NSC
- Investors needing liquidity or emergency access to funds (no premature withdrawal)
- High-income individuals in higher tax brackets where interest taxation reduces net returns
- Investors seeking inflation-beating returns (market-linked investments may be better)
- Those looking for regular income (interest paid only at maturity)
💡 Pro Tips for NSC Investment
- • Laddering strategy: Invest in NSC every year to have maturity every year after 5 years
- • Always add a nominee to ensure smooth transfer in case of unforeseen events
- • Keep certificates safely - physical certificate is proof of investment
- • Can be used as collateral for bank loans
- • Interest compounding maximizes returns compared to simple interest schemes
NSC vs 5-Year Tax Saving FD
| Feature | NSC (National Savings Certificate) | Tax Saving Fixed Deposit (FD) |
|---|---|---|
| Interest Rate | 7.7% (Govt Regulated) | Varies by Bank (Usually 6.5% - 7.5%) |
| Compounding | Annually | Quarterly |
| Interest Payout | Only at Maturity (Cumulative) | Monthly/Quarterly/Annual/Cumulative |
| Tax Benefit (Inv) | Section 80C (up to ₹1.5L) | Section 80C (up to ₹1.5L) |
| Tax on Interest | Interest deemed reinvested (Yrs 1-4) qualifies for 80C deduction. Only 5th year interest taxable. | Fully Taxable as per slab |
| TDS | No TDS | TDS applicable if interest > ₹40k/₹50k |
| Premature Withdrawal | Not Allowed (except death/court order) | Not Allowed (Lock-in 5 years) |
Eligibility & Required Documents
Eligibility Criteria
- Indian Residents of any age can invest
- Minors can invest through guardian/parent
- Joint accounts can be opened (maximum 3 adults)
- Trust accounts are permitted
- NRIs are NOT eligible
- HUF (Hindu Undivided Family) accounts NOT allowed
Required Documents
Identity Proof
- • Aadhaar Card
- • PAN Card
- • Passport
- • Voter ID
- • Driving License
Address Proof
- • Aadhaar Card
- • Passport
- • Utility Bills (not older than 3 months)
- • Bank Statement
- • Ration Card
Other Documents
- • PAN Card (mandatory for investment > ₹50,000)
- • 2 Passport-size photographs
- • Duly filled NSC application form
- • Payment (Cash/Cheque/Demand Draft)
For Joint Accounts
- • All above documents for each holder
- • Joint account declaration form
- • Operating instructions (E or S mode)
Tax Implications
Tax Benefits
- Section 80C Deduction: Principal investment qualifies for deduction up to ₹1.5 lakh per year
- Deemed Reinvestment: Interest earned in years 1-4 is deemed to be reinvested and eligible for 80C deduction
- No TDS: No Tax Deducted at Source on NSC interest (unlike bank FDs)
Tax Liabilities
- Interest Taxation: All interest earned (including deemed reinvestment) is taxable as "Income from Other Sources"
- 5th Year Interest: Interest in the final year is fully taxable as it's not reinvested
- Tax rate depends on your income tax slab (10%, 20%, 30%)
- Must self-report interest earned in ITR even though no TDS is deducted
Example: Tax Calculation
For ₹1,00,000 investment at 7.7% for 5 years:
- • Year 1 Interest: ₹7,700 (Deductible under 80C + Taxable)
- • Year 2 Interest: ₹8,293 (Deductible under 80C + Taxable)
- • Year 3 Interest: ₹8,931 (Deductible under 80C + Taxable)
- • Year 4 Interest: ₹9,618 (Deductible under 80C + Taxable)
- • Year 5 Interest: ₹10,358 (Only Taxable, not deductible)
- Total Interest: ₹44,900 | Tax Saving (20% bracket): ₹8,908
Premature Withdrawal & Closure
Important: No Premature Withdrawal
Unlike many other investment schemes, NSC does NOT allow premature withdrawal under normal circumstances. The investment is locked-in for the full 5-year period.
This is a critical factor to consider before investing - ensure you won't need the money for 5 years.
Exceptional Cases for Premature Encashment
- Death of Account Holder: Certificate can be encashed without penalty. Nominee/legal heir receives principal + accrued interest
- Court Orders: On orders from a competent court for forfeiture or other legal reasons
- Pledgee Forfeiture: If NSC is pledged and pledgee forfeits the certificate
Alternative: Loan Against NSC
If you need funds urgently, you can pledge your NSC certificate and take a loan from banks/financial institutions instead of premature withdrawal.
- • Typical loan amount: 75-90% of surrender value
- • Continue earning NSC interest while using loan amount
- • Repay loan with interest to bank/NBFC
- • Certificate remains intact and matures normally
Nomination: Importance & Process
Why Nomination is Critical
While nomination is optional, it is strongly recommended to add a nominee to your NSC certificate. Here's why:
- Smooth Transfer: In case of demise, funds transfer directly to nominee without legal hassles
- Avoid Legal Complications: Without nominee, legal heirs must provide succession certificate (time-consuming & expensive)
- Family Security: Ensures your hard-earned money reaches your loved ones quickly
- Can be Changed: Nominee can be changed or added later if not done initially
Nomination Rules
Single Holder Account
- • Can nominate one person
- • Nominee can be anyone (family member, friend, trust)
- • Minors can be nominees (guardian required)
- • Nomination can be changed anytime
Joint Account
- • Nomination requires all holders' consent
- • On death of one holder, others continue
- • Nominee gets proceeds only after all holders' demise
- • Operating mode (E or S) doesn't affect nomination
How to Add/Change Nominee
- Visit the post office where NSC was purchased
- Fill Nomination Form (available at post office)
- Provide nominee's name, age, address, and relationship
- For minor nominees, provide guardian details
- Submit form with NSC certificate for endorsement
- Nomination will be recorded on certificate
- Keep updated copy of certificate safely
How to Open an NSC Account
Step-by-Step Process
1
Visit Nearest Post Office
Locate the nearest post office. NSC is available at all post offices across India. Some authorized banks also offer NSC.
2
Collect & Fill Application Form
Get the NSC application form from the counter. Fill in details: Name, Address, PAN, Aadhaar, Investment Amount, Nominee details.
3
Submit Documents
Attach: ID Proof (Aadhaar/PAN/Passport), Address Proof, Photographs, PAN Card (if investment > ₹50,000).
4
Make Payment
Pay via Cash (up to ₹20,000), Cheque, or Demand Draft in favor of the post office. Ensure payment is from your account.
5
Receive Certificate
Post office will issue NSC certificate immediately with: Certificate Number, Investment Amount, Issue Date, Maturity Date. Keep it safe!
💡 Important Points to Remember
- • Single Account: Individual can open account in their name alone
- • Joint Account: Can be opened with up to 2 other adults (total 3)
- • Minor Account: Guardian can open on behalf of minor child
- • Multiple Certificates: Can purchase multiple NSC certificates without limit
- • Instant Process: Certificate issued immediately after payment
- • Physical Certificate: Take good care - it's proof of your investment
- • No Online Purchase: NSC can only be purchased at post office/authorized banks
Frequently Asked Questions
Common questions about National Savings Certificate (NSC)
What is NSC (National Savings Certificate)?
NSC is a government-backed fixed-income investment scheme available at any Post Office in India. It offers guaranteed returns with tax benefits under Section 80C. NSC has a fixed tenure of 5 years with 7.7% annual interest rate (compounded annually but paid at maturity). It's ideal for risk-averse investors seeking safe and guaranteed returns.
What is the current NSC interest rate for 2025?
The current NSC interest rate is 7.7% per annum for the 5-year tenure, compounded annually. The interest rate is reviewed quarterly by the Government of India. The interest earned in the first 4 years is deemed to be reinvested and qualifies for deduction under Section 80C, while the interest in the 5th year is taxable.
What will be the maturity value of 1 lakh in NSC after 5 years?
If you invest ₹1,00,000 in NSC at the current interest rate of 7.7%, the maturity value after 5 years will be approximately ₹1,44,903. The total interest earned would be ₹44,903. This calculation uses the compound interest formula: A = P × (1 + r/100)^n.
Which is better: 5-year Tax Saving FD or NSC?
Both NSC and 5-year Tax Saving FD offer Section 80C benefits. NSC currently offers ${CURRENT_NSC_RATE}% (compounded annually), while FD rates vary by bank. NSC interest is deemed reinvested (except final year) and qualifies for 80C, whereas FD interest is fully taxable annually. However, FDs offer monthly/quarterly interest payout options, while NSC pays only at maturity. Choose NSC for better tax-adjusted returns and FD for regular income.
Is NSC interest tax-free?
No, NSC interest is NOT tax-free. However, it has a unique tax advantage. The interest earned for the first 4 years is deemed to be reinvested and can be claimed as a tax deduction under Section 80C (within the ₹1.5 lakh limit). Only the interest earned in the 5th (final) year is fully taxable as 'Income from Other Sources' and cannot be claimed under 80C. No TDS is deducted on NSC interest.
What is the minimum and maximum investment in NSC?
The minimum investment is ₹1,000 with no maximum limit. You can invest any amount in multiples of ₹100 above the minimum. Multiple certificates can be purchased, and there's no upper cap on total investment, making it suitable for investors with varying investment capacities.
Who is eligible to invest in NSC?
Any Indian resident can invest in NSC - individuals, joint accounts (up to 3 adults), guardians on behalf of minors, and trust accounts. NRIs (Non-Resident Indians) are NOT eligible to invest in NSC. There's no age restriction for investment, making it accessible to all age groups including minors through guardians.
Can I withdraw NSC before maturity?
Premature withdrawal is NOT allowed in most cases. However, encashment before 5 years is permitted only in specific situations: death of the account holder, forfeiture by a pledgee, or on orders of a court. There are no provisions for loans against NSC. Plan your investment considering the 5-year lock-in period.
What documents are required to open an NSC account?
Required documents include: Identity proof (Aadhaar card, PAN card, Passport, Voter ID), Address proof (Aadhaar, utility bills, passport), Passport-size photographs, and PAN card (mandatory for investments above ₹50,000). For joint accounts, documents of all holders are required. KYC compliance is mandatory as per post office regulations.
What happens to NSC after the account holder's death?
In case of death, the NSC can be encashed prematurely without penalty. The nominee or legal heir will receive the principal amount plus accrued interest till the date of death. For joint accounts, the certificate continues with the surviving holder(s). It's crucial to add a nominee while purchasing NSC to ensure smooth transfer to the rightful person.
Can I take a loan against NSC?
Yes, NSC can be used as collateral for taking loans from banks and financial institutions. However, the post office itself does not offer loans against NSC. Banks may offer loans up to 75-90% of the certificate's surrender value. Check with your bank for specific terms and interest rates on loans against NSC.
Is nomination mandatory for NSC?
While nomination is not mandatory, it is highly recommended. Adding a nominee ensures that in case of the holder's demise, the NSC proceeds are transferred smoothly to the nominee without legal complications. For single holder accounts, you can nominate one person. For joint accounts, nomination can be added with consent of all holders.
Can NSC be transferred to another person?
NSC can be transferred from one person to another, and from one post office to another. Transfer can happen due to death of holder (to nominee/legal heir), on court orders, on pledgee forfeiture, or on joint holder's request. Transfer requires proper documentation and verification at the post office.
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