NSC — Sovereign Guaranteed Scheme. Interest rate: 7.7% p.a. compounded annually, paid at maturity. Tenure: 5 years. No TDS. Min. investment: ₹1,000. No maximum limit. 80C benefit on investment + years 1-4 interest.
Last updated: July 2026. Interest rate: 7.7% p.a. (Q1 FY 2026-27). Verify at nsiindia.gov.in.
Investment Details
₹
₹1K₹10L
Interest Rate
% p.a.
Income Tax Slab
Staggered Investment Strategy
Each certificate = same investment amount, purchased 1 year apart
Maturity Value (single certificate)
₹1,44,903
on ₹1,00,000 invested for 5 years
Total Interest
₹44,903
Return %
44.9%
Staggered Total
₹1,44,903
Principal invested₹1,00,000.00
Total interest earned₹44,903.16
80C deduction — Year 1 investment₹1,00,000.00
Total 80C deductions over 5 years₹1,35,878.00
Year-5 taxable interest (at maturity)₹12,870.00
Tax on Year-5 interest (at slab)₹2,574.00
Net Post-Tax Maturity Value₹1,42,329.00
Year
Opening Balance
Interest Earned
80C Deduction
Closing Balance
Year-by-Year NSC Growth
Principal
Accumulated Interest
NSC vs FD vs PPF vs SCSS — Maturity Comparison (same investment)
NSC (7.7%)
FD (7.0%)
PPF (7.1%)
SCSS (8.2%)
Scheme
Rate
Tenure
Maturity Value
Total Interest
Decision Layer — NSC Suitability Analysis
Formula
Maturity Value = P × (1 + r)^5
where P = Principal, r = Annual rate (7.7% = 0.077)
Year-N Interest = Balance(N-1) × r
80C Deduction (Yrs 1-4) = Interest earned that year
Year-5 interest = taxable income at maturity
Disclaimer: NSC interest rate is revised quarterly by the Government of India. Current rate: 7.7% p.a. (Q1 FY 2026-27). Tax treatment shown is indicative — consult a CA for personal tax planning. Last updated: July 2026. Verify at nsiindia.gov.in.
The current NSC (National Savings Certificate) interest rate for Q1 FY 2026-27 (April–June 2025) is 7.7% per annum, compounded annually and paid at maturity. The rate is reviewed quarterly by the Government of India. Always verify the latest rate at nsiindia.gov.in before investing.
How is NSC interest calculated?
NSC interest is compounded annually but paid at maturity (end of 5 years). The formula is: Maturity Value = P × (1 + 0.077)^5. For ₹1,00,000 invested, the maturity value is ₹1,44,903, so total interest earned is ₹44,903. Year-by-year interest accrues but is not paid out; it is deemed reinvested under Section 80C for years 1 to 4.
Is NSC interest taxable in India?
Yes. NSC interest is taxable as "Income from Other Sources". However, there is no TDS on NSC. Interest earned in years 1–4 is deemed reinvested and qualifies as fresh 80C deduction each year. Only the year-5 interest (received at maturity) is taxable income without further 80C offset. The original investment qualifies for 80C deduction up to ₹1.5 lakh. Consult a CA for personalised tax planning.
What is the difference between NSC and FD?
Key differences: (1) Interest rate — NSC 7.7% vs bank FD typically 6.5–7.5%; (2) Tax benefit — NSC investment qualifies for 80C; FD only in 5-year tax-saver FD; (3) TDS — No TDS on NSC; FDs attract 10% TDS if interest exceeds ₹40,000 (₹50,000 for seniors); (4) Liquidity — NSC cannot be encashed before 5 years (except on death); FDs allow premature withdrawal with penalty; (5) Guarantee — NSC is sovereign guaranteed.
Can I claim 80C deduction on NSC every year?
Yes — this is one of NSC's greatest advantages. The original investment qualifies for 80C in year 1. Additionally, interest earned in years 1, 2, 3 and 4 is deemed reinvested and qualifies as fresh 80C deductions in those respective years, subject to the overall ₹1.5 lakh annual 80C limit. Year-5 interest is received at maturity and is taxable — no fresh 80C deduction for year 5 interest.
What is the minimum and maximum investment in NSC?
Minimum investment in NSC is ₹1,000, thereafter in multiples of ₹100. There is no maximum limit in NSC. However, the 80C deduction benefit is capped at ₹1.5 lakh per year across all 80C instruments. Investments above ₹1.5 lakh still earn the same interest but don't attract additional 80C tax benefit beyond the cap.
How does staggered NSC investment work?
In a staggered strategy, you invest in NSC every year for 2–5 years. For example, ₹1 lakh per year for 5 years means from year 5 onwards, one certificate matures annually — providing regular liquidity. Each certificate has its own 5-year tenure and independent 80C benefit. This strategy ensures annual 80C deductions on both the fresh investment and prior-year accrued interest, and delivers a rolling maturity payout from year 5.