The National Savings Certificate (NSC) is a fixed income scheme launched by the government of India. You can open your NSC account at any post office across the country. The low-risk savings scheme offers an interest rate of 6.8% and capital protection. You can invest with a minimum of Rs. `1000 in this savings scheme which comes with a lock-in period of 5 years.
Know the scheme and how much NSC return you will get by the end of the term using the National Savings Certificate Calculator.
What is NSC Calculator, and How Does it Help You?
The post office NSC calculator is a tool to determine the maturity amount of the scheme. Since the scheme is for 5 years and the current interest rate is 6.8%, you can easily calculate the maturity amount you will receive once the scheme matures. The NSC interest is compounded once a year and is reinvested every year. Enter the investment amount in the calculator along with the current interest rate, and the tool will calculate the total earnings on the invested capital at maturation.
- The calculator is a quick way to figure out how much you’ll get at maturity.
- You may immediately evaluate if the strategy meets your financial objectives without wasting more time.
Key Takeaways
- You can use the post office NSC calculator to know the maturity amount you will receive after 5 years
- The National Savings Certificate is a government-backed scheme and offers low-risk and guaranteed profit
- The current NSC interest rate 6.8% is applicable for 1.4.2020 – 31.03.2022
- NSC is a great form of liquid investment and is safe and steady
- The majority of scheme holders use the NSC calculator to check their profits
How Does the NSC Calculator Work?
With the help of an NSC Calculator, you can easily calculate the amount you will receive after 5 years. The NSC calculator also includes the NSC interest rate calculator, which means you can calculate how much interest you will accrue on your investment. An NSC scheme matures in 5 years and is compounded yearly, as mentioned above. Once you enter the figures of your scheme, you will know the amount you will get.
So suppose you have invested Rs. 2,00,000 for 5 years. The current interest rate set by the government on NSC is 6.8%, and the compounding frequency is yearly. You will receive Rs. 2,77,899 total.
How to Buy a National Savings Certificate (NSC)?
You can get a National Savings Certificate at your nearest post office. All you require is an authentic ID and address proof. Here’s how you can buy a National Savings Certificate-
- Go to your nearest post office
- Fill out the application form to buy the NSC certificate
- Carry your original address proof and identification card
- You can buy the certificate with a cheque, cash or the demand draft.
Please note that if you buy the certificate with the cheque or the demand draft, you will have to make it in favour of the postmaster of that particular post office from where you are buying the certificate.
National Savings Certificate (NSC) Interest Calculator & Maturity Period
A National Savings Certificate is a 5-year investment scheme run by the government of India. The low-risk scheme offers guaranteed interests and high security on the amount invested. With the NSC interest calculator, you can easily determine how much return you will get upon the amount you invest. You can also get an estimate with NSC return calculator.
Suppose the amount you are planning to invest does not meet the target return you have in mind; you can adjust it accordingly to reach the intended return. You can also increase the investment maturity period from 5 years to 10 years.
Advantages of Using NSC Calculator
Calculating an NSC’s interest and maturity amount can be time-consuming and difficult. Once a year, the interest is compounded. The interest earned is put back into the investment. After five years, the investor receives the interest plus the principal. Understandably, an investor would choose to know how very much their NSC investment has grown.
Some advantages of utilising the calculator are as follows:
- It is simple to use and understand.
- You can save time by not doing maths yourself.
- You don’t need to double-check the calculations because it’s correct.
- It is completely free and accessible from any location.
Features of National Savings Certificate (NSC)
- Small Investments: NSC takes deposits as little as Rs 1000, making investing simple for everyone.
- Fixed Income: NSC guarantees the account holder’s money back. They will have a steady income.
- Maturity Period: NSC schemes have a 5-year maturity period. Since December 2015, the 10-year maturation period issue has been discontinued.
- Power of Compounding: Interest generated on NSC throughout the investment period is automatically reinvested in the plan.
- Corpus after maturity: The account holder receives the whole amount at maturity.NSC payments have no TDS. However, the investor must pay the necessary tax when the money is received.
- Loan Collateral: Premature withdrawals are not permitted at NSC. It will allow investors to get loans by using the NSC certificates as collateral.
What are the Tax Benefits of NSC Investment?
Maximum people prefer to invest in National Savings Certificate because of the lower risk and the numerous tax benefits. So, you save on taxes when you invest in NSC. Here are the tax benefits you will receive-
- As an investor, you can claim a tax deduction on the investment in NSC of up to Rs. 1.5 Lakhs under Income Tax Section 80C.
- For the first four years, the interest on National Savings Certificate can also be claimed as an investment deduction.
However, the interest you will earn in the last year of the scheme will become taxable as it will be given to you.
Word to Remember
Loan Collateral: Loan Collaterals are assets that money lending institutions accept as security while granting loans.
Conclusion
National Savings Certificates are best suited for risk-averse investors seeking higher returns than FDs. It’s a fantastic option for investors to diversify their portfolios using a fixed-return, fixed-duration asset.
FAQs:
NSC or the National Saving Certificate is an investment scheme by the government of India. As an investor, you can deposit your money and get guaranteed returns. The current interest rate is 6.8%, and the scheme is immune to market trends.
Like other fixed-income products like PPF and Post Office FDs, the National Savings Certificate is a safe and low-risk investment. It demands a minimum deposit of Rs 1000 and has no maximum deposit restriction. There is no TDS on NSC investments.
The current rate on National Saving Certificates NSC is 6.8%. Once a year, it is compounded.
The investor can cash out the investment when it reaches maturity by providing a few documents at any post office. They may also choose to have it deposited into their bank account.
National Savings Certificate NSC investments cannot be withdrawn prematurely. Premature withdrawals are only authorised in exceptional situations, such as when an investor dies, or a court order is issued.
The interest on NSC is 6.8% for this quarter. Every quarter, the Ministry of Finance releases the NSC interest rate. The NSC returns are guaranteed, compounded yearly, and paid at maturity.
At NSC, early withdrawals are not tolerated. However, investors can get loans using the NSC certificate as collateral. Early withdrawals are only authorised in exceptional situations, such as when an investor dies, or a court order is issued. Any family member can be named a nominee under the NSC plan (even a minor). In the unfortunate event of the investor’s death, the nominee might inherit the returns.
NSC investments up to Rs 1.5 lakh are tax-free under Section 80C of the Income Tax Act. They are locked in for five years. NSC certificates yield a fixed rate of interest. The current interest rate is 6.8%. Like other fixed-income schemes like PPF and Post Office FDs, NSC is a risk-free investment. A minimum deposit of Rs 1000 is required. In NSC, there is no maximum investment restriction. There is no TDS on NSC investments.
If the maturity amount is up to Rs.20,000, one of the options is to pay cash.
Cheques will be accepted for amounts greater than Rs.20,000.
The Government of India changes the interest rate on National Saving Certificate schemes every quarter. The interest rate is compounded annually but is only due at maturity.
Non-Resident Indians (NRIs) are not permitted to invest in NSC programs.
NSC only has one issue type – the VIII issue. An IX problem existed previously, but the government decided to end it. The maturity term for the VIII issue is five years. The maturity period for the IX issue was ten years.
The interest is collected from an NSC compound investment until maturity. As a result, the compound interest formula may be used to compute the returns on NSC investments. In NSC, the formula for calculating the final maturity value is:
A = P (1 + r/100)^n
Where
A = Final value of the maturity
P = Principal invested amount
r = Rate of interest offered
n = number of years, i.e., the maturity period
Loans can be taken out against NSC, but only up to 80% of their value.
