With the Reserve Bank recently slashing the repo rate, several banks have begun reducing interest rates on fixed deposits (FDs) as well. If you're looking to invest your money long-term with better returns and tax benefits, the Post Office's National Savings Certificate (NSC) could be a smarter alternative to traditional bank FDs. Here's how much return you can expect when you invest between ₹1 lakh and ₹5 lakh in this scheme.
The National Savings Certificate (NSC) is a five-year fixed-income investment scheme offered by the Post Office. As of now, the interest rate is 7.7% per annum, compounded annually but payable at maturity.
If you invest ₹5,00,000 in NSC, you’ll earn approximately ₹2,24,517 in interest over 5 years.
Total Maturity Amount: ₹7,24,517
Investing ₹4,00,000 will earn you about ₹1,79,614 as interest.
Total Maturity Amount: ₹5,79,614
A ₹3,00,000 investment will yield around ₹1,34,710 in interest.
Total Maturity Amount: ₹4,34,710
If you invest ₹2,00,000, you'll receive roughly ₹89,807 in interest.
Total Maturity Amount: ₹2,89,807
For an investment of ₹1,00,000, you’ll earn approximately ₹44,903 in interest.
Total Maturity Amount: ₹1,44,903
Investments in NSC qualify for tax deductions under Section 80C of the Income Tax Act, up to a limit of ₹1.5 lakh annually. You can start investing with a minimum of ₹1,000. There is no maximum limit on investment.
Any Indian citizen can open an NSC account.
Joint accounts are allowed.
Guardians can invest on behalf of minors or mentally unsound individuals.
Minors above 10 years can invest in their own name.
NSC certificates can be transferred to another person once during the tenure.
NSC matures in 5 years and cannot be withdrawn prematurely, except under specific circumstances:
Death of the account holder
Court order
For joint accounts, the death of both account holders
Once the NSC is issued, the interest rate remains locked for the entire tenure, regardless of future changes.
