National Saving Certificate i.e. NSC is one of the most popular instruments when it comes to Post Office Investment. In this blog, I am sharing the “Post Office NSC Calculator” with you so that you can get an idea about the Interest and Maturity amount of NSC.
Download Post Office NSC Calculator: https://moneymaestro.in/wp-content/uploads/2023/10/NSC-Excel-Calculator_Post_Office.xlsx
Before jumping into the actual calculation, let’s see some important features of NSC, its benefits, and its rules.
| National Saving Certificate (NSC) offered by | Government of India |
| Investment through | Post Office |
| Where to open an account? | 1. Post-office branch, 2. Nationalize Banks 3. The Government has allowed Public Sector Banks and few Private Banks to accept deposits under NSC. |
| Documents required | 1. Recent photograph 2. Identity Proof 3. Address Proof |
| Interest Rate | 7.70% p.a. (October 2023 to December 2023) |
| Change in Interest Rate | Quarterly |
| Compounding Frequency | Annual |
| Payable at | Maturity |
| Total Tenure (Maturity) | 5 Years |
| Minimum Deposit | Rs. 1,000/- (in multiples of Rs. 100/-) |
| Maximum Investment Limit | No Limit |
| Application for NSC | 1. Apply as single holder (adult) 2. Apply as joint owners (up to 3 adults) 3. Apply as a guardian on behalf of minor or on behalf of person of unsound mind 4. Apply as a minor above 10 years in his /her own name. |
| Taxability | Deposit Amount is eligible for Tax Deduction under section 80C of Income Tax Act. (Maximum deduction of Rs. 1,50,000/-) |
| Loan against NSC | Yes, can be availed (Generally Banks can offer loans up to 85%-90% of the NSC accrued value) |
| Premature Withdrawal | Can ONLY be prematurely closed before 5 years in below scenarios: 1. On the death of a single account, or any or all the account holders in a joint account 2. On forfeiture by a pledgee being a Gazette officer. 3. On order by court. |
For more information you can visit official website of Post Office: https://www.indiapost.gov.in/Financial/pages/content/post-office-saving-schemes.aspx
Post Office NSC Calculation:
Interest on NSC can be calculated via Compound Interest formula.
Formula: P [1+ R/100] ^ n
P: Principle (Deposit Amount)
R: Interest Rate p.a.
n: Years
Let’s see some practical examples:
| Deposit Amount | Total Maturity Amount | Total Interest Amount |
| Rs. 50,000/- | Rs. 72,451/- | Rs. 22,452/- |
| Rs. 1,00,000/- | Rs. 144,903/- | Rs. 44,903/- |
| Rs. 1,50,000/- | Rs. 217,355/- | Rs. 67,355/- |
Tenure: 5 years
Interest Rate: 7.70% p.a.
You can download forms from official website: https://www.indiapost.gov.in/VAS/Pages/Form.aspx#SavingCertificates
Download Post Office NSC Calculator: https://moneymaestro.in/wp-content/uploads/2023/10/NSC-Excel-Calculator_Post_Office.xlsx
What are the Pros of Investing in NSC?
- As the Post Office NSC is offered by the Government of India, the safety of your deposit (principle) is ensured.
- Annual Compounding of Money.
- Interest rates are subject to changes, but it is guaranteed.
- Suitable Investment for Risk-Averse investors
- Your deposit amount is eligible for Tax Deduction under section 80C of the Income Tax Act, hence, tax efficient instrument.
- Though there is a lock-in period of 5 years (except in certain scenarios), a loan against NSC is available. Hence, emergency situations can be managed.
What are the Cons of Investing in NSC?
- The reinvestment option is not available in NSC. Investors would have to buy a new certificate every time to invest in this scheme.
- There is a Fixed Interest rate in NSC and hence your deposit would earn the same interest rate for 5 years. If the interest rate increases, investors would not get that benefit on an already invested NSC amount.
- The interest of the first four years is reinvested and therefore, can be claimed as a deduction under Section 80C of the ITA. In other words, 5th year’s interest is taxable according to the applicable income tax slab.
Interest Rates of Post Office Investments for October 2023 to December 2023 Quarter:
Conclusion:
Five-Year NSC is a traditional and popular investment due to its tax efficiency and guaranteed Returns.
You can consider investing if you are looking for a safe investment, guaranteed returns, and a Government-backed saving scheme.
Download Post Office NSC Calculator: https://moneymaestro.in/wp-content/uploads/2023/10/NSC-Excel-Calculator_Post_Office.xlsx
Note: Calculation indicated in Excel is for information purpose only. Actual amount may slightly differ.
Very well done! It is really useful! 👍👌