Worked example
Example with the default numbers — change them above.
Amount you invest: ₹1,00,000
Investing ₹1 L in NSC at 7.7% gives ₹1.45 L after 5 years, of which ₹44,903 is interest.
| Maturity value | ₹1.45 L · After 5 years |
|---|---|
| Amount you invest | ₹1 L · Paid once, at the start |
| Interest earned | ₹44,903 · 31% of the final amount |
| Money multiple | 1.45x · Year 5 interest is ₹10,360 against ₹7,700 in year 1 |
How the NSC Calculator works
- Enter the amount you invest (from ₹1,000, with no upper limit) and, if you wish, a different rate.
- At the end of year 1 your money earns the yearly rate. That interest is added to the amount, and nothing is paid out.
- In year 2 the rate applies to the bigger amount, so you earn interest on interest. This repeats until the end of year 5.
- At maturity you receive the original amount plus all the interest in one payment.
- The table lists the interest and the value at the end of each year.
NSC maturity value
Maturity value = P × (1 + r)^5
P = amount you invest
r = yearly interest rate as a decimal (7.7% = 0.077)
Interest earned = Maturity value − PAssumptions and limits
- The rate used applies for the full 5 years. For NSC the rate in force when you buy is the one that stays, as per the scheme rules; later quarterly changes do not affect certificates already bought.
- Interest compounds yearly and is paid only at maturity. Nothing is paid out in between.
- The calculation does not deduct tax. NSC interest is taxable, although under the old tax regime the investment can qualify for a Section 80C (now section 123 of the Income-tax Act, 2025) deduction and the first four years' interest is treated as reinvested. Check current rules for your situation.
- Although NSC pays interest only at maturity, the interest is generally taxable each year as it accrues, so the tax is due before the money arrives. Values are shown to the paisa; the certificate pays whole rupees.
- NSC cannot normally be encashed before maturity except in specified cases such as the holder's death. Premature exit is not modelled.
Frequently asked questions
How is NSC maturity value calculated?
NSC compounds once a year for 5 years, so the maturity value is the amount multiplied by (1 + rate) five times. For example, ₹1,00,000 at 7.7% becomes about ₹1,44,903. The interest is not paid yearly; it is paid together with the principal when the certificate matures.
What is the current NSC interest rate?
The NSC rate is 7.7% a year for Q3 FY2026-27, effective 1 October 2026. The Finance Ministry reviews small-savings rates every quarter, so the next change could come around 1 January 2027. For NSC, the rate on the day you buy the certificate stays fixed for its full five years. We last checked this rate on 21 October 2026; confirm with India Post or your bank before you invest.
Do I have to pay tax on NSC interest?
Yes, NSC interest is taxable. Under the old tax regime the amount invested can be claimed under Section 80C (now section 123 of the Income-tax Act, 2025), and the interest of the first four years is treated as reinvested and also counts toward the deduction. The last year's interest is generally taxable without that benefit. Rules change, so check the latest position.
What is the minimum and maximum investment in NSC?
You can start with ₹1,000, usually in multiples of ₹100. There is no maximum, so you may buy as many certificates as you want. Only investments within the Section 80C limit (now section 123) qualify for a deduction, and only under the old tax regime, so the useful amount depends on your tax situation.
Can I break an NSC before 5 years?
Normally no. NSC has a five-year lock-in and premature encashment is allowed only in limited cases, such as the death of the holder or an order of a court. You can usually pledge it as security for a loan. Because the money is tied up, treat it as savings you will not need for five years.
NSC or fixed deposit: which gives more?
Compare the effective yearly return and the tax. NSC compounds yearly at 7.7% and is government-backed, while a bank FD often compounds quarterly at a rate that varies by bank and tenure. Under the old regime, NSC also offers a Section 80C deduction. Try both calculators with the same amount and years.
Sources
- National Savings Institute (Ministry of Finance): National Savings Certificate and other schemes
- India Post: current interest rates on post office savings schemes
- Income Tax Department: Income-tax Act, 2025, section 123 – ₹1.5 lakh deduction for specified savings (old section 80C)
Logic and rates last verified on .
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Guides that go deeper
See worked examples
What common PPF, Sukanya Samriddhi, NSC and bank FD amounts grow to at current rates.
- How much will ₹10,000 in NSC become after 5 years? — Matures at ₹14,490
- How much will ₹50,000 in NSC become after 5 years? — Matures at ₹72,452
- How much will ₹1 lakh in NSC become after 5 years? — Matures at ₹1.45 L