NSC Calculator (National Savings Certificate)

Work out the maturity payout on a 5-year National Savings Certificate (NSC VIII Issue). Shows year-by-year compounding interest at the official sovereign rate and the Section 80C deemed reinvestment deduction.

Investing ₹1,00,000 in National Savings Certificates (NSC) at the current 7.7% sovereign rate yields ₹1,44,903 on 5-year maturity, earning ₹44,903 in total interest, of which ₹34,543 is eligible for Section 80C deemed reinvestment tax deduction.

National Savings Certificate (NSC)

Sovereign Backed

Calculate your maturity value, total interest, and Section 80C deemed reinvestment tax benefits for a 5-year NSC (VIII Issue).

Certificate Investment Amount

₹

Minimum ₹1,000, in multiples of ₹100. No upper limit on investment.

Government Notified Interest Rate

Official Ministry of Finance rate is 7.7% p.a. compounded annually.

Section 80C Deemed Reinvestment Rule

Interest accrued during Years 1, 2, 3, and 4 is treated as reinvested and qualifies for a Section 80C tax deduction within the ₹1.5 Lakh annual ceiling. Only Year 5 interest is taxable.

Maturity Payout (5 Years)

₹1,44,903

Effective annual yield: 7.7%

Total Interest Earned

₹44,903

Compounded annually at 7.7%

Section 80C Reinvested Interest

₹34,543

Years 1–4 deemed reinvestment (tax-deductible)

Year 5 Taxable Interest

₹10,360

Added to income from other sources at maturity

Maturity Breakdown: Principal vs Interest

Total₹1.45 L

Invested Deposit: ₹1,00,000
Accrued Interest: ₹44,903

Year-by-Year NSC Accrual & 80C Reinvestment Schedule

Year-by-Year NSC Accrual & 80C Reinvestment Schedule
Tenure	Opening Balance	Interest Accrued	Tax Treatment	Closing Balance
Year 1	₹1,00,000	₹7,700	Reinvested (80C Eligible)	₹1,07,700
Year 2	₹1,07,700	₹8,293	Reinvested (80C Eligible)	₹1,15,993
Year 3	₹1,15,993	₹8,931	Reinvested (80C Eligible)	₹1,24,924
Year 4	₹1,24,924	₹9,619	Reinvested (80C Eligible)	₹1,34,543
Year 5	₹1,34,543	₹10,360	Taxable (Maturity Year)	₹1,44,903

NSC Maturity Value (5 Years)

₹1,44,903

Total interest: ₹44,903 | 80C reinvested: ₹34,543

Small savings scheme interest rates are reviewed and notified quarterly by the Department of Economic Affairs, Ministry of Finance.

What it is:: A 5-year sovereign savings certificate issued by the Government of India through post offices and banks.
What it calculates:: Total maturity payout, annual compound interest accrual, and Section 80C deemed reinvestment benefits.

Key Assumptions

Fixed 5-year tenure with annual compounding.
Years 1 to 4 interest qualifies for Section 80C deemed reinvestment.
Year 5 interest is treated as taxable income at maturity.
No TDS deducted at source by India Post.

How it works

National Savings Certificate (VIII Issue) is a sovereign small savings instrument backed by the Government of India with a fixed tenure of 5 years.

Interest is compounded annually at the notified sovereign rate (currently 7.70% p.a.) and paid out as a lump sum along with the principal at maturity.

Section 80C Tax Deduction: The initial deposit qualifies for deduction under Section 80C up to ₹1,50,000.

Deemed Reinvestment Rule: Interest accrued at the end of years 1, 2, 3, and 4 is legally deemed to be reinvested into NSC and also qualifies for a fresh Section 80C deduction in those respective financial years. Only the year 5 interest is fully taxable.

Formula

Maturity Value = Principal x (1 + r/100)^5; Total Interest = Maturity Value - Principal

Principal: = Invested certificate amount (minimum ₹1,000)
r: = Annual interest rate notified by Ministry of Finance (7.70% p.a.)
5: = Fixed statutory tenure of 5 years

No Tax Deducted at Source (TDS) is subtracted by the Post Office at maturity.

Example calculation

₹1,00,000 in NSC (VIII Issue) at 7.70% p.a.

Invested Certificate Principal: ₹1,00,000
Maturity Tenure: 5 Years (Fixed)
Total Maturity Payout: ₹1,44,903
Total Interest Earned: ₹44,903
Section 80C Reinvested Interest (Y1–4): ₹34,543
Year 5 Taxable Interest: ₹10,360

Frequently asked questions

What is the current interest rate on NSC?

The Ministry of Finance has notified an interest rate of 7.70% p.a. for the 5-Year National Savings Certificate (VIII Issue), compounded annually.

How does the Section 80C deemed reinvestment benefit work for NSC?

Under the Income Tax Act, the interest accrued on NSC during the first four years is not paid out in cash; instead, it is automatically reinvested into the scheme. The Income Tax Department treats this accrued interest as a deemed reinvestment, making it eligible for a deduction under Section 80C (within the overall ₹1.5 Lakh limit). Only the interest accrued in the fifth (final) year cannot be reinvested and is taxed under Income from Other Sources.

Is there an upper limit on NSC investment?

No. There is no maximum investment limit on National Savings Certificates. You can invest any amount in multiples of ₹100, starting from a minimum of ₹1,000.

Can NSC certificates be used as collateral for bank loans?

Yes. NSC certificates can be pledged with scheduled commercial banks and housing finance companies as security or collateral for personal, business, or educational loans.

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