NSC Calculator
Maturity, 80C tax benefit and an honest post-tax FD comparison for the 5-year National Savings Certificate.
Plan your NSC
Quick amounts
Minimum ₹1,000; no upper limit (80C benefit caps at ₹1.5L).
Set quarterly by the government and locked for the term; currently 7.7%.
Used to value the 80C saving and the tax on taxable interest.
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₹1.45 L
Paid at year 5 — 1.45× your ₹1.00 L, at 7.70% compounded annually
31% of the maturity is interest the government pays you — 69% is your own capital back.
Tax benefit: your ₹1.00 L 80C deduction saves about ₹30,000 in tax at a 30% slab.
Sovereign-backed; the 7.70% rate is locked at purchase, so this maturity is known up front. Interest is taxable as income. Verify the current rate before investing.
How your certificate compounds each year over the fixed 5-year term.
| Year | Opening value | Interest earned | Closing value |
|---|---|---|---|
| Year 1 | ₹1.00 L | ₹7,700 | ₹1.08 L |
| Year 2 | ₹1.08 L | ₹8,293 | ₹1.16 L |
| Year 3 | ₹1.16 L | ₹8,931 | ₹1.25 L |
| Year 4 | ₹1.25 L | ₹9,619 | ₹1.35 L |
| Year 5 | ₹1.35 L | ₹10,360 | ₹1.45 L |
NSC vs a 5-year FD — the honest, post-tax picture
Both tax the interest at your slab. NSC's real edge is the 80C deduction on the amount invested, which a plain FD doesn't give.
NSC @ 7.7%
- Maturity (pre-tax)
- ₹1.45 L
- Tax on interest (30%)
- −₹13,471
- After-tax maturity
- ₹1.31 L
- + 80C tax saved
- +₹30,000
- Net benefit
- ₹1.61 L
5-year FD @ 7.0%
- Maturity (pre-tax)
- ₹1.41 L
- Tax on interest (30%)
- −₹12,443
- After-tax maturity
- ₹1.29 L
- 80C deduction
- None (plain FD)
- Net benefit
- ₹1.29 L
Once the 80C deduction is counted, NSC comes out about ₹32,398 ahead of a 7.0% FD here. Without the 80C benefit, the post-tax outcomes are nearly identical — so NSC only wins if you have 80C room to spare.
FD assumes quarterly compounding (the usual Indian convention). A dedicated tax-saver FD would also earn 80C; a normal FD does not. Verify current rates and slab rules before deciding.
NSC officially compounds annually. This shows how the same ₹1.00 L at 7.7% would mature if interest were credited more often — more frequent compounding nudges maturity slightly higher.
YearlyNSC
Half-yearly
Quarterly
Monthly
Annual is the actual NSC convention; the others are illustrative. The gap between yearly and monthly here is only ₹1,877 on ₹1.00 L — compounding cadence matters far less than the rate itself.
- ₹1.00 L grows to ₹1.45 L in 5 years.
- 80C deduction of ₹1.00 L saves ~₹30,000 tax.
- For a ₹2.50 L maturity, invest ₹1.73 L today.
How much to invest to hit a target
Lump sum needed today at 7.7% so the NSC matures to a round figure in 5 years.
| Target maturity | Invest now | Interest |
|---|---|---|
| ₹1.00 L | ₹69,012 | ₹30,988 |
| ₹2.50 L | ₹1.73 L | ₹77,471 |
| ₹5.00 L | ₹3.45 L | ₹1.55 L |
| ₹10.00 L | ₹6.90 L | ₹3.10 L |
What if you invest more?
Same 7.7% rate and 5-year term — scaling up your lump sum.
| Invested | Maturity | Interest | 80C |
|---|---|---|---|
| ₹1.00 L | ₹1.45 L | ₹44,903 | ₹1.00 L |
| ₹2.00 L | ₹2.90 L | ₹89,807 | ₹1.50 L |
| ₹5.00 L | ₹7.25 L | ₹2.25 L | ₹1.50 L |
| ₹10.00 L | ₹14.49 L | ₹4.49 L | ₹1.50 L |
80C deduction caps at ₹1,50,000 — larger amounts still earn interest but get no extra deduction.
Key insight
Your ₹1.00 L grows to ₹1.45 L — safe and government-backed. The interest is taxable, so NSC's real advantage over a plain FD of the same rate is the 80C deduction, worth about ₹30,000 to you at a 30% slab.
Key takeaways
- Invested: ₹1,00,000 (locked 5 years)
- Interest earned: ₹44,903 (taxable)
- Maturity in 5 years: ₹1.45 L
- Effective return: 7.70% p.a.
- 80C deduction: up to ₹1.00 L — saves ~₹30,000 tax
Open a zero-balance savings account online
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Your plan: ₹1.00 L in NSC for 5 years → about ₹1.45 L.
Plan the rest of your safe money
Compare NSC with the other fixed-income options — KVP, PPF, FD and RD — before you lock in.
NSC rates are set by the government each quarter; the figures above use the rate you entered and are planning estimates. Interest is taxable as income and tax rules change — confirm the current rate and slab rules with India Post or a tax adviser before investing.
How an NSC maturity is calculated
M = P × (1 + r)⁵
- M
- maturity value (paid at year 5)
- P
- amount invested (lump sum)
- r
- annual rate ÷ 100, compounded once a year
- 5
- the fixed 5-year NSC term
Worked example
With your inputs — ₹1,00,000 at 7.70%, compounded annually: r = 0.0770 and the growth factor is (1 + 0.0770)5 ≈ 1.4490, so the certificate matures to about ₹1.45 L — roughly ₹44,903 of interest, for an effective return of 7.70% p.a. The rate is locked when you buy, so this maturity is known up front; the interest is taxable as income.
Most asked NSC questions
NSC is a fixed-income savings scheme offered through India Post and backed by the Government of India. You invest a lump sum, it compounds annually at a government-set rate, and the full amount plus accrued interest is paid out at maturity. Because it is sovereign-backed, the return is not market-linked — the rate in force when you buy is locked in for the full 5-year term.
NSC has a fixed 5-year term. The money cannot normally be withdrawn before maturity except in limited cases such as the holder's death, forfeiture by a pledgee, or a court order, so treat it as fully locked for the period. That lock is the trade-off for a guaranteed, fixed return.
Yes. The amount invested qualifies for a deduction under Section 80C, up to the overall ₹1.5 lakh limit. The interest accrued each year (except the final year) is treated as reinvested in fresh NSC and also counts towards 80C in those interim years, which can quietly top up your deduction. This 80C deduction is NSC's real edge over a plain FD of the same rate.
Yes, NSC interest is taxable and must be declared as income each year as it accrues. The accrued interest for the first four years is reinvested and eligible for 80C, but the final year's interest is fully taxable in your hands with no reinvestment benefit. There is no TDS on NSC, so you must report the interest yourself.
On the headline rate they are similar; both are safe and both tax the interest. NSC's advantage is the 80C deduction on the amount invested (and on interim-year interest), which a normal FD doesn't give — only a dedicated tax-saver FD does. If you've already used your 80C limit elsewhere, a plain FD of the same rate gives a near-identical post-tax outcome. Compare the post-tax figures on this page.
You can start an NSC from ₹1,000, and in multiples of ₹100 above that, with no upper limit on the amount you can invest. The 80C tax benefit, however, is capped at ₹1.5 lakh across all your 80C instruments combined — anything above that still earns interest but gets no further deduction.
About the National Savings Certificate
What NSC is, and why it's predictable
The National Savings Certificate is a fixed-term savings scheme sold through India Post and guaranteed by the Government of India. You invest a lump sum for a fixed 5-year term, and the money compounds annually at a rate the government revises each quarter. Because it is sovereign-backed and not market-linked, the rate in force when you buy is locked in for the full term — so the maturity value is fully known up front.
How the maturity is calculated
NSC compounds once a year over five years: maturity = principal × (1 + rate)5. There is no compounding-frequency choice and no tenure choice — both are fixed by the scheme. The effective return shown above equals the booked rate because compounding is annual, unlike a quarterly-compounded FD where the effective yield runs slightly higher than the headline rate.
The 80C deduction is the real edge
NSC's headline rate is similar to an FD, and both tax the interest — so the difference that matters is tax. The amount invested qualifies for a Section 80C deduction up to the ₹1.5 lakh limit, and the interest accrued in the first four years is treated as reinvested in fresh NSC and is also eligible — a quiet annual top-up to your deduction. The catch is that the interest is taxable as income, and the final year's interest has no reinvestment benefit. There is no TDS, so you declare the accrued interest yourself.
Is the 5-year lock worth it?
NSC suits money you won't need for five years where you want a guaranteed return, capital safety and an 80C deduction in one instrument. The lock-in is the trade-off: the money can't normally be withdrawn early. For a longer tax-free horizon PPF often wins; for short-term needs an FD is more flexible. Many savers use NSC as one slice of their 80C mix rather than the whole of it. The figures here are planning estimates — confirm the current rate and rules before investing.