WealthJot.ai
WealthJot.ai
📜 NSC Calculator
National Savings Certificate — maturity value after the 5-year term

NSC: maturity value (5 yrs) grows to ₹1.45 L, based on the entered inputs.

Formula

Maturity Value = Principal × (1 + r)^t, compounded annually at the NSC interest rate over the fixed 5-year lock-in

Worked example
InputValue
Investment Amount₹1,00,000
Interest Rate7.7%
Maturity Value (5 yrs)₹1,44,903
Total Interest₹44,903
Amount Invested₹1,00,000
Effective Annual Yield7.7%

How NSC compounding works

The National Savings Certificate is a 5-year, sovereign-backed deposit at ~7.7% — but unlike an FDA bank deposit locked for a fixed term at a fixed rate., the interest isn’t paid out: it compounds annually and arrives as one lump sum at maturity. The calculator shows that maturity value and the effective yieldAnnual dividend as a percentage of the share price. the compoundingEarning returns on your returns — growth that accelerates over time. produces.

Example₹1 lakh in NSC at 7.7% matures at ~₹1.45 lakh after 5 years. The quiet tax trick: each year’s accrued interest is deemed reinvested, so it qualifies for a fresh 80CA tax deduction of up to ₹1.5 lakh for set investments. deductionAn amount subtracted from income before tax. (old regime) in years 1-4 — only the final year’s interest is effectively taxable without relief. For old-regime savers with 80CA tax deduction of up to ₹1.5 lakh for set investments. room, that pushes NSC’s post-tax return well above a same-rate FDA bank deposit locked for a fixed term at a fixed rate..
NSC vs the 5-year tax-saver FDA bank deposit locked for a fixed term at a fixed rate. is the head-to-head that matters: same 80CA tax deduction of up to ₹1.5 lakh for set investments. eligibility, same 5-year lock — but NSC usually pays ~0.2-0.7% more, carries a sovereign (not bank) guarantee, has no TDS, and the reinvested-interest 80CA tax deduction of up to ₹1.5 lakh for set investments. trick adds a further edgeA repeatable, structural reason your trades win over time.. The tax-saver FDA bank deposit locked for a fixed term at a fixed rate. wins only on convenience (your bank app) and payoutA cash payout of company profits to shareholders. optionsThe right, not the obligation, to buy or sell at a set price.. On the numbers, NSC is the better 5-year lock for old-regime savers almost every time.
Common mistakeForgetting the accrued interest at filing time. The deemed-reinvestment benefit requires you to declare each year’s accrued interest as income AND claim it under 80CA tax deduction of up to ₹1.5 lakh for set investments. — skip the declarations and the entire 5 years of interest lands as taxable income at maturity. Set a filing reminder; the benefit is real but not automatic.
✓ You learnedNSC = 5-year sovereign lock at ~7.7%, compoundingEarning returns on your returns — growth that accelerates over time. to maturity, 80CA tax deduction of up to ₹1.5 lakh for set investments. on the deposit AND on years 1-4 of reinvested interest (old regime). It beats tax-saver FDs on rate, guarantee and TDS — the honest default for a 5-year guaranteed 80CA tax deduction of up to ₹1.5 lakh for set investments. slot.
FAQs
Is NSC interest taxable?

Yes — at your slab — but with a structural cushion: interest for years 1-4 is deemed reinvested and can be claimed under 80C (old regime), so only the final year’s interest typically hits your return without an offsetting deduction. There’s no TDS on NSC, unlike FDs. New-regime filers get no 80C, so for them NSC is simply a taxable 7.7% with a sovereign guarantee.

Can I break an NSC early?

Essentially no — premature encashment is allowed only on the holder’s death, court order, or forfeiture by a pledgee. Treat the 5 years as truly locked (you can, however, pledge NSC as loan collateral — a useful emergency escape hatch that keeps the compounding intact).

Learn the concepts
PPF vs FD