The National Savings Certificate (NSC) is one of the best investments for risk-averse investors. NSC is 100% safe as it is fully guaranteed by the government of India. It earns a fixed rate of return with no scope for market risks. The National Savings Certificate calculator can help you figure out the total return you can earn on your investment. Investments in NSC also qualify for a tax rebate under section 80C of the Income Tax Act.

There are several financial instruments available in the market to invest your hard-earned money. You can choose the one that is best suited to your risk appetite, return expectations, and the achievement of your financial goals. The NSC is a low-risk product that is extremely popular in India. The NSC calculator is used to compute the total interest and the maturity value of your investment made in the scheme.

What is a National Savings Certificate?

National Savings Certificate is a saving and investment scheme launched by the central government. NSC investments can be made in any of the post offices across India. It is suitable for small investors and senior citizens who seek ultra-safe investments with fixed returns and tax benefits. Only resident Indian individuals can invest in NSC. The other details of the scheme are given in the table below.

Minimum Investment Rs.1,000
Maximum Investment No Upper Limit
Interest Rate 6.80% (per annum)
Lock-in Period 5 Years
Tax Deductions Up to Rs.1.50 Lakh u/s 80C
Risk Profile Low

Note: The National Savings Certificate interest rate is revised on a periodic basis by the central government. The interest gets compounded annually. The principal, along with accumulated interest, is payable at the time of maturity (5 years). The NSC VIII issue is currently open for investment.

What is an NSC Calculator? How to Use it?

The NSC calculator is an online tool that can be used to calculate the interest earned and the maturity value of the NSC investment. The following details are required to be entered into the calculator.

  • Investment Amount
  • Applicable Rate of Interest
  • Investment Period

Once you enter the above details and click ‘Submit’, the following information will be displayed instantly by the NSC interest calculator.

  • Total Interest Amount
  • Maturity Amount

Method of Calculation

The compound interest method is applicable in the case of NSC. So the following formula is useful to calculate the amount to be received at maturity.

A = P * (1 + r/n) ^ (n * t)

A = Maturity Amount

P = Investment Amount

r = Rate of Interest (p.a.)

n = Frequency of Compounding

t = Period of Investment

Illustration:

If you invest Rs.2 lakh in an NSC scheme for five years at 6.80% per annum, the calculation is as follows.

P = 2,00,000

r = 6.80% or 0.068

n = 1 (annual compounding in NSC)

t = 5

A = 2,00,000 * (1 + 0.068/1) ^ (1*5)

    = 2,00,000 * (1.3895)

    = 2,77,900

According to the NSC calculator for 2022, the total maturity amount is Rs.2,77,899. The total interest earned in 5 years will be (2,77,900 – 2,00,000) = Rs.77,900.

Benefits of the NSC Calculator

The interest earned on your NSC investment gets compounded every year. This makes it difficult to perform the calculations manually. The other benefits of this tool are as follows.

  • The NSC calculator is simple & easy for everybody to use. With just a few inputs, the results are displayed in seconds and save you time & effort.
  • Manual calculations are often prone to human errors and mistakes. The calculator gives 100% accurate results.
  • The NSC interest calculator is a wonderful tool for planning your future financial goals. It gives the exact sum that you will receive at the time of maturity.
  • The NSC calculator is completely free to use. You can use it multiple times without any cost.

Key Features of the NSC Scheme

Some of the important features & benefits of NSC are listed below.

  • Fixed Return: The scheme pays a fixed rate of return to the investors. It is currently 6.80% p.a. 
  • Safety of Capital: The investment is safe & secure as it is fully guaranteed by the central government. But the interest rates are revised periodically at the government’s discretion. 
  • Fixed Maturity: The current National Saving Certificate scheme has a fixed maturity period of 5 years
  • Compounding Benefit: The interest earned on your NSC investment gets compounded every year to deliver a higher effective rate of return
  • Tax Benefit: Annual investment of up to Rs.1.50 lakh in NSC is eligible for tax deductions under section 80C of the Income Tax Act
  • Maturity Amount: The principal, along with interest earned on the NSC investment, will be paid at the time of maturity. There will be no intermittent interest payouts.
  • Premature Withdrawal: The NSC scheme does not allow investors to make premature withdrawals. It is permitted only in situations of death or court order.
  • Availability of Loans: The NSC certificate can be pledged as collateral security to avail loans from banks & financial institutions
  • Nomination: The NSC investment can be nominated in favour of any of the family members. You can also nominate in favour of your minor children.

Conclusion

Safety, fixed returns, and tax rebates are the primary benefits that attract investors to the NSC scheme. It is ideal for small investors who cannot assume higher risks of market-linked investment products. It is advisable to use the National Savings Certificate Calculator before you proceed to invest in the NSC scheme.

FAQs on NSC Interest Calculator

1) Is the rate of return on NSC fixed?

The current interest rate on NSC is 6.80% p.a. The rate is revised every quarter at the discretion of the Ministry of Finance

2) Can I withdraw my NSC investment before maturity?

NSC scheme has a fixed maturity of 5 years. Premature withdrawals are allowed only under exceptional circumstances.

3) How is the NSC interest calculator useful for investors?

NSC calculator is an online tool that calculates the total interest gained and the final maturity value. You can use this information to plan your future.