NSC Scheme : Looking for a safe and reliable investment option with guaranteed returns? The National Savings Certificate (NSC) might be just what you need. Backed by the Government of India, the NSC is a popular small savings scheme that not only offers fixed interest rates but also comes with tax-saving benefits under Section 80C. If you’re wondering how much you need to deposit now to get ₹2,36,758 after 5 years, this detailed guide will help you understand the process clearly.
What is the NSC (National Savings Certificate) Scheme?
The National Savings Certificate is a government-backed fixed-income investment scheme primarily designed for small and mid-level investors who want to earn a steady return with minimal risk. Issued by post offices across India, NSCs have a maturity period of 5 years and offer compounded interest that is reinvested annually.
Key Features of the NSC Scheme:
- Maturity Period: 5 years
- Interest Rate: 7.7% per annum (as of Q1 FY 2025)
- Minimum Investment: ₹1,000
- Maximum Investment: No upper limit
- Compounding: Annually (but paid at maturity)
- Tax Benefits: Eligible for deduction under Section 80C of the Income Tax Act
How Much to Invest Now to Get ₹2,36,758 After 5 Years?
To determine how much you need to invest today to get ₹2,36,758 after 5 years, we must consider the current NSC interest rate of 7.7% compounded annually.
The formula used is: Final Amount = Principal × (1 + Rate)^Time
Based on the current interest rate of 7.7%, here’s how your investment will grow:
| Initial Deposit (₹) | Maturity Amount After 5 Years (₹) |
|---|---|
| 10,000 | 14,493 |
| 25,000 | 36,232 |
| 50,000 | 72,465 |
| 75,000 | 1,08,698 |
| 1,00,000 | 1,44,931 |
| 1,50,000 | 2,17,397 |
| 1,62,565 | 2,36,758 |
So, if your goal is to receive ₹2,36,758 after 5 years, you need to invest approximately ₹1,62,565 today in the NSC scheme at the current interest rate.
See More : EPS Pension Hike to ₹7,500
NSC Interest Rates Over the Years
Interest rates on NSC are revised quarterly by the Ministry of Finance and can vary over time. Here’s a look at the interest trends in the recent past:
| Financial Year | Quarter | Interest Rate (%) |
|---|---|---|
| 2023-24 | Q1 | 7.7 |
| 2023-24 | Q2 | 7.7 |
| 2023-24 | Q3 | 7.7 |
| 2023-24 | Q4 | 7.7 |
| 2024-25 | Q1 | 7.7 |
| 2022-23 | Q4 | 7.0 |
| 2022-23 | Q3 | 6.8 |
| 2022-23 | Q2 | 6.8 |
As you can see, the current interest rate is one of the highest in recent years, making it an attractive time to invest.
Benefits of Investing in NSC
Here’s why NSC remains a preferred choice for conservative investors:
- Guaranteed Returns: Backed by the Indian government, your investment is safe.
- Compound Interest: Interest is compounded annually, increasing your final returns.
- Tax Deduction: Investments up to ₹1.5 lakh qualify for tax deduction under Section 80C.
- No Market Risk: Unlike mutual funds or stocks, your money isn’t exposed to market fluctuations.
- Easy Accessibility: Available at all India Post offices and now also digitally via select banks and platforms.
Who Should Invest in NSC?
NSC is ideal for the following categories of investors:
- Salaried Individuals: Looking for stable returns and tax savings.
- First-Time Investors: Seeking safe investment options with government backing.
- Senior Citizens: Who prefer secure instruments over risky ones.
- Parents: Wanting to save for children’s future education or marriage.
How to Open an NSC Account?
Opening an NSC account is a straightforward process. You can do it at your nearest post office or select online platforms.
Required Documents:
- Identity Proof (Aadhaar, PAN Card, Voter ID, etc.)
- Address Proof
- Passport-size photographs
- Account opening form (available at post office)
- Initial deposit amount (cash, cheque, or demand draft)
Steps to Open NSC:
- Visit the nearest post office or authorized online NSC portal.
- Fill out the NSC application form.
- Submit the required KYC documents.
- Deposit the investment amount.
- Collect the NSC certificate or digital confirmation.
NSC vs Other Investment Options
How does NSC compare to other popular investment instruments?
| Investment Option | Interest Rate (Approx.) | Lock-in Period | Tax Benefits | Risk Level |
|---|---|---|---|---|
| NSC | 7.7% | 5 years | Yes (80C) | Very Low |
| PPF | 7.1% | 15 years | Yes (EEE) | Very Low |
| Fixed Deposit | 6.5%-7.5% | 1-10 years | Yes (some) | Low |
| Mutual Funds (ELSS) | Varies (10-15% avg.) | 3 years | Yes (80C) | Moderate-High |
| Gold | Varies | None | No | High |
As you can see, NSC offers a good balance of safety, returns, and tax benefits, especially when compared to volatile or longer-term options.
Is NSC Right for You?
If you’re someone who prioritizes safety, steady returns, and tax-saving benefits, NSC can be a solid choice in your portfolio. With the current 7.7% interest rate, a one-time deposit of ₹1,62,565 can grow to ₹2,36,758 in just 5 years — that’s a hassle-free, risk-free way to achieve a financial goal.
However, keep in mind that NSC interest is taxable (although TDS is not deducted), and premature withdrawals are allowed only under specific circumstances. Also, if you’re looking for liquidity or higher returns, you may want to explore diversified options.