The National Savings Certificate (NSC) is a 5-year savings scheme sold at post offices. It is backed by the Government of India, pays a fixed rate for the full five years, and qualifies for a tax deduction under the old tax regime. It suits people who want a guaranteed return without market risk.
Key NSC rules
- Tenure: 5 years. The certificate cannot be closed early except in special cases, such as the death of the holder or a court order.
- Investment: minimum ₹1,000, in multiples of ₹100. There is no upper limit.
- Interest: 7.7% a year for July–September 2026, compounded yearly and paid only at maturity. The rate you get on the day you invest stays fixed for all 5 years.
- Tax: the investment qualifies for the old-regime deduction (Section 80C) up to ₹1.5 lakh. Interest is taxable, but the interest of the first four years is treated as reinvested and also qualifies for the deduction.
How to use the NSC calculator
- Enter the investment amount.
- Check the interest rate. It is set by the government every quarter.
NSC formula
Maturity value = Investment × (1 + rate ÷ 100)^5Example
You invest ₹1,00,000 in NSC at 7.7%.
| Year | Value at year end |
|---|---|
| 1 | ₹1,07,700 |
| 2 | ₹1,15,993 |
| 3 | ₹1,24,924 |
| 4 | ₹1,34,544 |
| 5 | ₹1,44,903 |
- Maturity value = ₹1,44,903
- Total interest = ₹44,903
NSC vs other safe options
NSC's rate is fixed for 5 years, which helps when rates are falling. Compare it with a bank FD for the same period using the FD calculator, and with the tax-free PPF for longer goals.
FAQ
What is the current NSC interest rate?
7.7% a year for the July–September 2026 quarter. The government reviews it every quarter, but your certificate keeps the rate it was bought at.
Is NSC interest taxable?
Yes, it is added to your income. The interest for the first four years is treated as reinvested, so it also counts towards the old-regime deduction for that year.
Can I withdraw NSC before 5 years?
Generally no. Early encashment is allowed only in special cases such as the death of the holder, forfeiture by a pledgee or a court order.
Is there a maximum limit for NSC?
No. You can invest any amount, but the tax deduction is limited to ₹1.5 lakh a year under the old regime.