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Calculators Government Schemes

National Savings Certificate (NSC)

Enter your investment — get the exact 5-year maturity value, year-by-year compounding table, 80C breakdown for each financial year, and a live comparison vs PPF, SCSS, and tax-saving FDs. Based on the official NSC (VIII Issue) Scheme 2019 gazette.

NSC Calculator

₹
Rate: 7.70% p.a. (annual compounding)
Principal invested
₹1,00,000
Interest earned
₹44,903
Maturity value
₹1,44,903
5-year multiplier
1.449×
Yr 1Yr 2Yr 3Yr 4Yr 5

Years 1–4 (interest 80C eligible) Year 5 (interest taxable at maturity)

YearOpening balanceInterest @ 7.70%Closing balance80C eligible?
Year 1₹1,00,000₹7,700₹1,07,700Yes
Year 2₹1,07,700₹8,293₹1,15,993Yes
Year 3₹1,15,993₹8,931₹1,24,924Yes
Year 4₹1,24,924₹9,619₹1,34,544Yes
Year 5₹1,34,544₹10,360₹1,44,903No — taxable
Total / Maturity₹44,903₹1,44,903

Interest in years 1–4 is "deemed to have been reinvested" (Para 5(3), G.S.R. 919(E), 12 Dec 2019) and qualifies for Section 80C deduction in the FY it accrues. Year 5 interest is paid at maturity and is taxable as "income from other sources." Rate: 7.70% p.a., annual compounding (Q1 FY 2026-27). Minimum investment: ₹1,000; further deposits in multiples of ₹100. No maximum limit (Para 4(2), G.S.R. 919(E)).

NSC in 2026: the quiet 7.7% compounder

7.7% sounds unremarkable. Most investors scroll past NSC to look at mutual funds or the latest small finance bank FD. That is a mistake worth correcting.

  • 7.7% beats PPF (7.1%) by 60 basis points — guaranteed. On a 5-year, ₹1 lakh investment, that difference compounds to roughly ₹3,000 more at maturity. Not enormous, but it is a guaranteed differential, not a projected one. You know exactly what you will receive on Day 1 of purchase.
  • Sovereign guarantee with zero credit risk. NSC is backed by the Government of India under the Government Savings Promotion Act, 1873. Unlike corporate FDs or even bank FDs (DICGC insurance only covers ₹5 lakh), there is no default risk whatsoever.
  • 5-year horizon, not 15. PPF locks your money for 15 years. NSC locks it for exactly 5. If you have a finite goal — a car down payment, a home renovation, a child's school fees — NSC aligns cleanly with 5-year planning cycles.
  • No TDS, no surprises at payout. NSC does not deduct TDS. You receive the full maturity amount. You declare the year-5 interest in your ITR and pay tax at your slab rate — but only on the last year's interest, not on the entire gain.
  • The honest caveat: it is illiquid. NSC premature closure is restricted to death, court order, or pledgee forfeiture. If you may need the money before 5 years, NSC is not for you. Use a liquid fund or a short FD instead, and invest in NSC only what you are genuinely comfortable locking away.

The hidden 80C: five waves of tax savings

Every investor who buys NSC knows the first 80C claim: the amount you invest in the year of purchase. What almost nobody knows is that NSC gives you four more 80C claims — one each year for years 1 through 4 — from the reinvested interest.

Here is the exact legal basis. Para 5(3) of G.S.R. 919(E) (the NSC Scheme 2019 gazette) says:

"The interest as specified in the Table below shall accrue to the holder or holders of the certificate at the end of each year and the interest so accrued at the end of each year upto the end of the fourth year shall be deemed to have been reinvested on behalf of the holder and aggregated with the amount of face value of the certificate."

The Income Tax Act treats this "deemed reinvestment" as a fresh NSC investment in each year — and therefore 80C-eligible. The result: one NSC certificate generates five separate 80C claims spread across its 5-year life.

The five waves — worked example at ₹1,00,000 and 7.7%

Wave When 80C Claim Tax saved (30%) Nature
1 Year of purchase ₹1,00,000 ₹30,000 Principal investment
2 FY +1 (Year 1 interest) ₹7,700 ₹2,310 Deemed reinvested
3 FY +2 (Year 2 interest) ₹8,293 ₹2,488 Deemed reinvested
4 FY +3 (Year 3 interest) ₹8,932 ₹2,680 Deemed reinvested
5 FY +4 (Year 4 interest) ₹9,619 ₹2,886 Deemed reinvested
FY +5 (Year 5 interest) — taxable — −₹3,361 Taxable income (no 80C)
Net after all taxes ₹37,003 Total tax saving minus year-5 tax

At the 30% slab: you save ₹40,364 in tax via 80C over 5 years, then pay ₹3,361 tax on year-5 interest. Net tax benefit: ₹37,003 on a ₹1 lakh investment. Combined with the ₹44,903 in total interest earned, your total 5-year gain (interest + tax savings − year-5 tax) exceeds ₹81,000 on a ₹1 lakh investment.

The 80C ceiling caveat: Each year's 80C claim is capped at ₹1,50,000 across all eligible investments (NSC + PPF + ELSS + life insurance premium etc.). If you are already at ₹1.5L from other investments, the reinvested interest claims provide no additional benefit. Plan your 80C allocation accordingly — NSC works best when it occupies a meaningful portion of the annual ₹1.5L ceiling.

What actually happens at maturity

Unlike PPF (which has three distinct post-maturity options), NSC is simple: the certificate pays out in full at the end of year 5. There is no auto-renewal, no option to extend, no rollover. The money is yours.

At maturity (offline) Visit the issuing post office with Form-2, original certificate, and identity proof. Payment by credit to savings account or cheque.
At maturity (online, e-mode) Maturity amount is auto-credited to your linked Post Office Savings Account on the maturity date. No visit required.
What is paid Full maturity amount = principal + all 5 years' interest, in one lump sum.
Year 5 tax The year-5 interest component of the payout is taxable. Declare it under "Income from Other Sources" in your ITR for that financial year. No TDS is deducted.
After maturity No automatic reinvestment. If you want to continue in NSC, purchase a fresh certificate with the maturity proceeds. The new purchase gives you a fresh 80C claim and a fresh 5-year cycle.
Reinvestment tip Purchase a fresh NSC within the same financial year as maturity to maintain your 80C claim continuity without a gap year.

Premature closure: what the gazette actually says

Many financial websites say NSC "cannot" be closed early. That is slightly wrong. It can be — but under exactly three conditions, all specified in Para 7(1) of G.S.R. 919(E). Here they are verbatim.

1
Death of the account holder.

In a single account: death of the sole holder. In a joint account: death of any or all account holders. This is the most common legitimate premature closure. The nominee or legal heir receives the proceeds per Para 9 of the gazette.

2
Court order.

Where a court directs premature closure — for example, in attachment proceedings or estate distribution matters. Note: unlike PPF (which is explicitly protected from court attachment), NSC does not have an explicit attachment-protection clause in the 2019 scheme rules.

3
Forfeiture by a Gazetted Government Officer pledgee.

When NSC is pledged as collateral to a Gazetted Government Officer (not a bank) and the pledgee forfeits the certificate under the terms of the pledge. This is rare in practice; most NSC pledges are to banks and NBFCs.

Interest on premature closure (Para 7(2)–(4))

Period held Interest paid
Less than 1 year from deposit date No interest — principal only
1 year or more but less than 3 years Post Office Savings Account rate (currently 4% p.a., simple, for complete months)
3 years or more but before maturity Per gazette table (interpolated at 6-month intervals) — verify exact values with issuing post office

The key takeaway: NSC is stricter than PPF on premature closure. PPF allows early exit for illness, higher education, or change to NRI status from year 5, with only a 1% interest penalty. NSC allows no such exits. If there is any chance you will need the money before 5 years, NSC is not the right instrument.

Loan against NSC: the pledge process

NSC is one of the most widely accepted forms of collateral for personal and business loans at banks and NBFCs. The legal basis is Para 6 of G.S.R. 919(E). The process is clean and well-defined.

1
Fill Form-3 — the pledge/transfer application — at your issuing post office. Bring the original NSC certificate (for physical mode) and an acceptance letter from the lending bank.
2
Postmaster endorsement: The authorised officer stamps the certificate: "Transferred as security to [Bank Name]." For e-mode NSC, the endorsement is electronic in the DOP system.
3
Certificate is held by the bank for the loan duration. The bank (as transferee) is deemed the depositor for the purpose of the pledge period (Para 6(4)).
4
Interest keeps accruing at the normal NSC scheme rate throughout the pledge period. The loan's interest rate (charged by the bank) is separate and applies on the loan amount.
5
On loan repayment: The bank provides written authority for re-transfer. The postmaster endorses: "Transferred back to [account holder]." The certificate reverts to the original holder.
Eligible pledgees (Para 6(2)) include: the President of India or Governors in official capacity; RBI, scheduled banks, cooperative banks; public or private corporations; local authorities; NHB-approved housing finance companies. Pledges to individuals are not permitted — only institutions and government entities.

NSC vs PPF: the honest comparison

PPF is often described as the "safe" choice and NSC is treated as a niche alternative. The numbers tell a more nuanced story.

Parameter NSC (VIII Issue) PPF
Interest rate (2026) 7.7% p.a. 7.1% p.a.
Compounding Annual Annual (calculated monthly on min balance, credited 31 Mar)
Tenure 5 years (fixed) 15 years (extendable in 5-year blocks)
Type of investment Lump sum (one-time per certificate) Periodic deposits (min ₹500/yr; max ₹1.5L/yr)
Maximum investment No limit ₹1,50,000/yr
80C on principal Yes Yes
80C on interest Yes (years 1–4 reinvested interest) N/A (interest is fully tax-free; no 80C claim needed)
Tax on interest Year 5 interest taxable as income Fully tax-free (EEE)
Premature closure Death / court order / Gazetted pledgee forfeiture only After year 5 for illness, higher education, NRI status (1% penalty)
Partial withdrawal Not available From Year 7 onwards (50% of balance)
Loan facility Yes — pledge to bank/NBFC Yes — from Year 3 to Year 6 (25% cap, 1% interest)
Minimum investment ₹1,000 per certificate ₹500 per year
NRI eligible No (existing can run to maturity) No (existing can run to 15-year maturity only)
HUF eligible No No
Joint account Yes (up to 3 adults) No

The verdict

  • Choose NSC if: you have a 5-year goal, you want a higher guaranteed rate than PPF, you have 80C headroom to utilise the reinvested-interest claims, or you want to invest more than ₹1.5 lakh per year in government-backed savings.
  • Choose PPF if: you want fully tax-free returns (EEE status), you are building a 15+ year corpus (retirement, long-term goals), or you value the partial withdrawal and post-maturity flexibility that PPF offers.
  • The often-overlooked option: use both. PPF for the long-term EEE compounding engine; NSC for each 5-year goal alongside it. The ₹1.5L 80C limit applies to the total of both, so plan the split intentionally.

How to declare NSC interest in your ITR: step by step

NSC is the only common savings instrument that requires you to declare income every year — even though you receive nothing in cash until maturity. Most investors either skip this entirely (incorrect) or declare the full 5-year interest only at maturity (also incorrect). Here is the right way.

Why you must file every year (not just at maturity)

Para 5(3) of G.S.R. 919(E) states that interest accrued in Years 1–4 is "deemed to have been reinvested." The Income Tax Act treats this deemed reinvestment as a fresh NSC investment each year — which makes it income in that year, not at maturity. Failing to declare it annually can attract a notice during scrutiny.

Year-by-year accrual schedule (₹1 lakh at 7.7%)

NSC Year Accrued Interest Schedule OS entry 80C entry (old regime) Net tax impact
Year of purchase — None ₹1,00,000 principal −₹30,000 tax saved
Year 1 ₹7,700 ₹7,700 (Other Sources) ₹7,700 (NSC accrued interest) ₹0 net
Year 2 ₹8,293 ₹8,293 (Other Sources) ₹8,293 (NSC accrued interest) ₹0 net
Year 3 ₹8,932 ₹8,932 (Other Sources) ₹8,932 (NSC accrued interest) ₹0 net
Year 4 ₹9,619 ₹9,619 (Other Sources) ₹9,619 (NSC accrued interest) ₹0 net
Year 5 ₹10,360 ₹10,360 (Other Sources) No 80C entry ₹3,108 tax at 30%

The net effect in the old tax regime: Years 1–4 cost you nothing in tax (income and 80C offset each other). Year 5 is the only year with real tax outgo.

Steps in ITR-1 (old tax regime)

1
Calculate this year's accrued interest. Use the year-by-year table in the NSC Calculator above, or compute manually: Year N interest = (Principal × 1.077^(N-1)) × 0.077.
2
Declare under Income from Other Sources. In ITR-1 → Part B (Gross Total Income) → Schedule OS → "Interest on deposits (not being SB account)" → enter the accrued interest amount.
3
Claim 80C simultaneously (Years 1–4 only). In ITR-1 → Part C (Deductions under Chapter VI-A) → Section 80C → "National Savings Certificates (VIII Issue)" → enter the same accrued interest amount. The two entries cancel: net income from NSC = ₹0 for Years 1–4.
4
Year 5 only: declare, no 80C offset. Enter the Year 5 accrued interest in Schedule OS as above. Do NOT enter it in 80C — Year 5 interest is not deemed reinvested; it is paid out at maturity and is fully taxable.
5
New tax regime: declare all years as income, skip 80C. Under Section 115BAC, 80C deductions are unavailable. Declare each year's accrued interest in Schedule OS; tax applies at your slab rate with no offset.
No TDS certificate for NSC. NSC does not generate Form 16A. There is no TDS deducted. You are responsible for maintaining your own records: purchase date, certificate number, principal amount, and the year-wise accrual schedule. The post office will issue an "annual accrual of interest certificate" on request (Para 5(3), G.S.R. 919(E)). Save this, or use the accrual table from the calculator above.
Common mistake to avoid: Many investors declare all NSC interest only in the year of maturity (Year 5). This is incorrect — the Income Tax Act requires accrual-basis declaration for NSC. Filing correctly for Years 1–4 (declaring and simultaneously claiming 80C) costs you nothing in tax while keeping your returns clean for scrutiny.

NSC under the new tax regime: is it still worth buying?

The new tax regime (Section 115BAC) became the default from FY 2023-24. Under it, Section 80C deductions do not apply — at all. The "five waves of 80C" that make NSC unusually tax-efficient under the old regime simply disappear.

Does that make NSC worthless under the new regime? No. But the decision framework changes completely.

What changes under the new tax regime

Tax treatment Old regime (with 80C) New regime (no 80C)
Year of purchase ₹1,00,000 → 80C claim → ₹30,000 tax saved (30% slab) No 80C. No tax saving on principal.
Years 1–4 interest Declare as income + claim 80C. Net tax = ₹0. Declare as income. Tax at slab rate (₹2,310/₹2,488/₹2,680/₹2,886 at 30%).
Year 5 interest Taxable as income. Tax = ₹3,108 at 30% on ₹10,360. Same — taxable as income. Tax = ₹3,108 at 30%.
Total tax on ₹1L NSC (30% slab) ₹3,108 (only Year 5 interest) ₹12,492 (all 5 years' interest)
Post-tax effective yield ~7.2% p.a. (net of Year 5 tax, plus principal 80C saving) ~5.8% p.a. (net of tax on all years' interest)

How NSC compares on a pure rate basis (new regime)

Under the new tax regime, NSC interest is taxed the same way as a fixed deposit. The comparison becomes straightforward: which instrument gives a higher pre-tax rate?

  • NSC (7.7%) vs large-bank 5-year FDs (6.5–7.5%): NSC typically wins on rate. SBI, HDFC, ICICI, Axis Bank 5-year tax-saving FDs as of 2026 range from 6.5% to 7.0%. NSC at 7.7% outperforms by 20–120 basis points. Both are taxable under the new regime — the higher pre-tax rate wins.
  • NSC (7.7%) vs small finance bank FDs (8.0–9.5%): Small finance banks (AU, Ujjivan, ESAF) offer higher rates on 5-year deposits. If a small finance bank offers 8.5%, that beats NSC at 7.7% — but comes with higher credit risk (DICGC insures only up to ₹5 lakh per bank). NSC has zero credit risk (sovereign guarantee).
  • NSC (7.7%) vs PPF (7.1%) under new regime: PPF interest remains fully tax-free (EEE status) regardless of which tax regime you choose. Under the new regime, PPF's EEE advantage becomes dominant. PPF at 7.1% tax-free vs NSC at 7.7% fully taxable — at the 30% slab, PPF's effective post-tax yield (~7.1%) beats NSC's (~5.8%). At 0% slab, NSC wins on raw rate.
The bottom line for new tax regime investors: NSC is still a reasonable 5-year fixed-income instrument — but its primary selling point (80C efficiency) is gone. Compare it purely on rate vs your bank's 5-year FD. At 7.7%, NSC is better than most large-bank FDs. If you are below the basic exemption limit (no income tax at all), NSC's 7.7% is one of the highest guaranteed rates available. If PPF is accessible to you, it is better under the new regime due to full tax exemption on interest.

The NSC laddering strategy: one maturity every year from Year 6

NSC's 5-year lock-in feels like a disadvantage. The laddering strategy turns it into an advantage: buy one NSC certificate per year for 5 consecutive years and from Year 6 onwards, you receive a guaranteed payout every year. Perpetual liquidity, sovereign backing, and overlapping 80C claims — all from a simple systematic strategy.

How the ladder works — ₹1 lakh per year at 7.7%

Year of purchase Amount invested Matures in Maturity amount
FY 2021-22 ₹1,00,000 FY 2026-27 ₹1,44,903
FY 2022-23 ₹1,00,000 FY 2027-28 ₹1,44,903
FY 2023-24 ₹1,00,000 FY 2028-29 ₹1,44,903
FY 2024-25 ₹1,00,000 FY 2029-30 ₹1,44,903
FY 2025-26 ₹1,00,000 FY 2030-31 ₹1,44,903
Total invested over 5 years Annual payout from Year 6 ₹1,44,903/yr

Total invested over the 5-year build-up: ₹5,00,000. Annual guaranteed payout from Year 6 onwards: ₹1,44,903 — that is the principal plus the full 5-year interest compounded at 7.7%. Each payout can be reinvested into a fresh NSC to keep the ladder rolling indefinitely.

The 80C angle: overlapping claims across multiple certificates

In any year after the first, you hold multiple active NSC certificates — each generating accrued interest that is 80C-eligible. The claims stack. By Year 5 of the ladder, your total 80C-eligible NSC claims in a single financial year are:

FY New purchase (80C) Accrued interest from older certs (80C) Total 80C from NSC
Year 1 ₹1,00,000 — ₹1,00,000
Year 2 ₹1,00,000 ₹7,700 (Cert 1 Yr 1) ₹1,07,700
Year 3 ₹1,00,000 ₹16,585 (Certs 1&2) ₹1,16,585
Year 4 ₹1,00,000 ₹27,044 (Certs 1, 2 & 3) ₹1,27,044
Year 5 ₹1,00,000 ₹38,726 (Certs 1–4) ₹1,38,726
Year 6+
(rolling)		 ₹1,00,000 (new) ₹38,726 (from 4 older certs) ₹1,38,726

From Year 5 onwards, ₹1,38,726 of your annual ₹1.5L 80C ceiling is covered by NSC alone — leaving only ₹11,274 of headroom for other 80C investments (PPF, ELSS, insurance premia etc.). Plan your overall 80C allocation accordingly.

Three things to know before you start a ladder

1
Rate is locked at the time of each purchase.

The NSC rate applicable at the time you buy the certificate is the rate for its entire 5-year life — regardless of subsequent quarterly changes. This is a pro: if rates fall after your purchase, you continue earning the higher locked rate. If rates rise, the next year's certificate captures the higher rate. Laddering gives you natural diversification across rate cycles.

2
Reinvest matured amounts before 31 March to claim 80C.

When a certificate matures, reinvesting the proceeds into a fresh NSC within the same financial year gives you a new ₹1,44,903 80C claim. If you miss the 31 March deadline, the 80C claim shifts to the following year. Plan your reinvestment with enough lead time.

3
Keep one nomination form per certificate.

As you accumulate multiple certificates, maintain a clear record of each — purchase date, certificate number, post office, and nominee. For e-mode NSC, all certificates are visible in your DOP net banking account. For physical certificates, maintain a physical register. A ladder of 5+ certificates held in paper format can become administratively complex — e-mode is recommended for new purchases.

NSC interest rate history (2016–2026)

The rate has been stable at 7.7% since April 2023 — over three years unchanged. It peaked near 8.1% in FY 2016-17 and bottomed at 6.8% from April 2020 through December 2022.

Period Rate (% p.a.)
FY 2026-27 Q1 (Apr–Jun 2026) 7.7% ✓
FY 2025-26 (all 4 quarters) 7.7%
FY 2024-25 (all 4 quarters) 7.7%
FY 2023-24 (all 4 quarters) 7.7%
FY 2022-23 Q4 (Jan–Mar 2023) 7.0%
FY 2022-23 Q1–Q3 (Apr–Dec 2022) 6.8%
FY 2021-22 (all 4 quarters) 6.8%
FY 2020-21 (all 4 quarters) 6.8%
FY 2019-20 Q1 (Apr–Jun 2019) 8.0%
FY 2019-20 Q2–Q4 (Jul 2019–Mar 2020)7.9%
FY 2018-19 Q3–Q4 (Oct 2018–Mar 2019)8.0%
FY 2018-19 Q1–Q2 (Apr–Sep 2018) 7.6%
FY 2017-18 Q1 (Apr–Jun 2017) 7.9%
FY 2017-18 Q2–Q3 (Jul–Dec 2017) 7.8%
FY 2017-18 Q4 (Jan–Mar 2018) 7.6%
FY 2016-17 Q1–Q2 (Apr–Sep 2016) 8.1%
FY 2016-17 Q3–Q4 (Oct 2016–Mar 2017)8.0%

Next rate review: July 2026 (Q2 FY 2026-27). Source: Ministry of Finance quarterly notifications. The use of the "historical rate" toggle in the calculator above lets you see what your NSC would have matured to at any past rate.

Frequently asked questions

What is the NSC interest rate in 2026?

7.7% per annum, compounded annually. This rate applies for Q1 FY 2026-27 (April–June 2026) and has been unchanged since Q1 FY 2023-24. The government reviews rates each quarter; check nsiindia.gov.in for the latest notification.

What is the NSC maturity amount for ₹1 lakh after 5 years?

At 7.7% p.a. (annual compounding), ₹1,00,000 matures to ₹1,44,903 after 5 years. Total interest: ₹44,903. Use the calculator above to see the year-by-year breakdown. For other amounts: ₹50K → ₹72,452; ₹2L → ₹2,89,806; ₹5L → ₹7,24,517; ₹10L → ₹14,49,034.

How do I calculate NSC maturity amount?

NSC maturity = P × (1 + r)^5, where P is the principal and r is the annual interest rate (0.077 for 7.7%). Example: ₹50,000 × (1.077)^5 = ₹50,000 × 1.449034 = ₹72,452. The "NSC compound interest calculator" tab above does this automatically and shows the year-by-year table.

Is NSC interest taxable or tax-free?

Partially taxable. Years 1–4 interest is "deemed reinvested" and qualifies for Section 80C deduction — net tax impact is zero if you have 80C headroom. Only year 5 interest (paid at maturity) is taxable as income from other sources. TDS is not deducted on NSC payouts. You must declare the interest in your ITR each year — not just at maturity.

Is NSC reinvested interest eligible for 80C?

Yes — this is NSC's best-kept secret. Para 5(3) of G.S.R. 919(E) says interest accrued in years 1–4 is "deemed to have been reinvested." The Income Tax Act treats this as a fresh NSC investment each year, making it 80C eligible. On ₹1 lakh at 7.7%, the total 80C-eligible amount over the certificate's life is ₹1,34,543 (principal + four years of compounding interest).

Can NSC be withdrawn before 5 years?

Almost never. Para 7(1) of G.S.R. 919(E) limits premature closure to three cases only: (1) death of the account holder, (2) court order, (3) forfeiture by a Gazetted Government Officer pledgee. There is no provision for premature withdrawal for medical emergencies, higher education, or any personal reason. NSC is genuinely locked for 5 years.

What interest is paid if NSC is prematurely closed?

If closed within 1 year: only principal returned (no interest). If closed after 1 year but before 3 years: interest at the Post Office Savings Account rate (currently 4% p.a., simple interest) for complete months held. If closed after 3 years: per the gazette table showing values at 6-month intervals. Verify exact values with the post office as the table was set at 2019-20 rates.

Can I take a loan against NSC?

Yes. NSC is accepted as collateral by banks, NBFCs, and other approved institutions. The process: submit Form-3 at the post office, postmaster endorses the certificate as "transferred as security," certificate is held by the lender during the loan period, and re-endorsed to you on repayment. NSC continues earning interest at the scheme rate throughout the pledge period.

NSC vs PPF: which is better in 2026?

NSC wins on rate (7.7% vs 7.1%) and on 80C for reinvested interest, and it exits cleanly at 5 years. PPF wins on fully EEE tax status (no year-5 tax) and on flexibility (partial withdrawals from Year 7). At the 5% and 20% tax slabs, NSC's post-tax maturity value actually exceeds PPF's at 5 years. At 30%, PPF marginally edges NSC on a pure post-tax basis — but NSC's 80C savings on years 1–4 interest close the gap entirely for most investors. See the Compare tab in the calculator above for exact numbers.

NSC vs tax-saving FD: which gives better returns?

NSC typically wins. Both have 5-year lock-ins and 80C on the principal. NSC at 7.7% usually exceeds bank tax-saving FD rates (typically 6.5–7.5%). More importantly, NSC's years 1–4 interest is also 80C eligible — FD interest is fully taxable every year with TDS. At the 30% slab, this makes NSC significantly more tax-efficient than a tax-saving FD of similar rate.

Who is eligible to invest in NSC?

Any Indian resident individual: adults for themselves, parents/guardians on behalf of minors of any age, and minors aged 10+ independently. Up to 3 adults can open a joint account. Any number of certificates can be held — no maximum limit on total investment. NRIs and HUFs are not eligible to open new accounts.

Can an NRI buy NSC in India?

No. NRIs cannot open new NSC accounts. If you purchased an NSC as a resident Indian and later became an NRI, the existing certificate continues to maturity at the normal rate. At maturity, the proceeds are paid out — there is no option to extend or renew as an NRI.

Can a HUF invest in NSC?

No. The NSC Scheme 2019 restricts accounts to individual residents and their guardians. HUFs, companies, and trusts are not eligible. This is the same restriction as PPF and SSY.

What are the NSC rules for minors?

Para 3(2)(a) of G.S.R. 919(E): a parent or guardian can open an NSC for a minor of any age. A minor aged 10 or above can open and operate independently. On attaining majority (18), the account continues normally. The investing parent or guardian can claim the 80C deduction on the investment.

What are NSC joint account rules?

Two types of joint accounts are available, both with up to 3 adults: Joint A-Type — payable to all holders jointly or survivor(s); Joint B-Type — payable to any one holder or survivor(s). For 80C deduction, only the first (primary) account holder can claim the benefit. NSC allows joint accounts; PPF does not.

How do I declare NSC interest in my ITR?

Each year for years 1–4: (1) Calculate the interest accrued for that year. (2) Declare it under "Income from Other Sources" in your ITR. (3) Simultaneously claim it as an 80C deduction — the two entries cancel. Year 5: declare the accrued interest as income — no 80C offset available. You can request a "certificate of annual accrual of interest" from the post office (Para 5(3) of the gazette). No TDS certificate is issued for NSC.

How do I buy NSC online?

Via India Post's DOP Net Banking portal (ebanking.indiapost.gov.in): log in → General Services → Service Requests → NSC. Enter the amount (min ₹1,000, multiples of ₹100); funds debit from your linked Post Office Savings Account. The certificate is issued in electronic (e-mode) format. For offline purchase, visit any post office branch with cash or a cheque.

How do I redeem NSC at maturity?

Physical NSC: visit the issuing post office with Form-2, original certificate, and identity proof. The full maturity amount (principal + all 5 years' interest) is credited to your savings account or paid by cheque. E-mode NSC: the maturity amount is auto-credited to your linked Post Office Savings Account on the maturity date — no visit needed.

Has the NSC interest rate changed in 2026?

No. NSC has been at 7.7% p.a. for every quarter from Q1 FY 2023-24 through Q1 FY 2026-27. This is over 3 years of rate stability. The next review is for Q2 FY 2026-27 (July 2026). The rate was last increased (from 7.0% to 7.7%) in April 2023.

What are NSC nomination rules?

Nomination is allowed and recommended. Even a minor can be a nominee — a person appointed by the depositor receives payment on the minor's behalf. If no nomination exists at death and the balance is up to ₹5 lakh, the post office can pay a rightful claimant on documentation (affidavit, indemnity bond). For amounts above ₹5 lakh without nomination, a court succession certificate is required (Para 9, G.S.R. 919(E)).

Can NSC be transferred to another person?

Only in specific cases (Para 8, G.S.R. 919(E)): on death of the holder (to nominees or legal heirs); on court order; on pledging (to the lender); on death of one joint holder (to surviving holders). Free person-to-person transfers for personal reasons are not permitted under the current scheme rules.

What is the difference between NSC and KVP?

NSC (7.7%) has a higher rate than KVP (7.5%). NSC gives 80C on principal and on years 1–4 reinvested interest; KVP gives no 80C at all. NSC has a fixed 5-year tenure; KVP matures when the money doubles (~115 months at 7.5%). KVP interest is fully taxable every year. At any income tax slab above 0%, NSC is more tax-efficient than KVP if you have 80C headroom.

Is NSC or ELSS better for 80C tax saving?

They serve different purposes. NSC gives guaranteed 7.7% with government backing and zero market risk. ELSS has historically delivered 10–14% CAGR over 5+ years but with full market volatility — and it has a shorter 3-year lock-in. The smart approach: use ELSS for growth and NSC for the guaranteed capital-protected component. They are not alternatives; they are complements in a diversified 80C strategy.

What is the minimum and maximum NSC investment?

Minimum: ₹1,000 (in multiples of ₹100 thereafter). Maximum: no limit — Para 4(2) of G.S.R. 919(E) explicitly states there is no maximum deposit limit. Any individual can hold any number of NSC certificates. Note: the 80C tax benefit is capped at ₹1,50,000 per year regardless of how much you invest in NSC.

All rules on this page are sourced from the National Savings Certificates (VIII Issue) Scheme 2019, G.S.R. 919(E), notified by the Ministry of Finance (Department of Economic Affairs) on 12 December 2019 under the Government Savings Promotion Act, 1873 (5 of 1873), amended by G.S.R. 284(E) dated 5 May 2020. This supersedes the National Savings Certificates (VIII Issue) Scheme, 1989. Interest rate verified as 7.7% p.a. for Q1 FY 2026-27 from nsiindia.gov.in. NSC IX Issue (10-year tenure) was discontinued in December 2015; only the VIII Issue (5-year) is currently available. Official scheme info: nsiindia.gov.in ↗

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