NSC (National Savings Certificate): Interest, Maturity & How It's Calculated

How much does a ₹1 lakh NSC investment grow to? At the current 7.7% rate over its fixed 5-year tenure, ₹1,00,000 matures to approximately ₹1,44,903 — an interest gain of ₹44,903. Here’s exactly how that number is calculated, and what it looks like at other investment amounts.

How NSC interest is actually calculated

NSC compounds annually at the declared rate, over a fixed 5-year tenure you can’t change. The formula is straightforward: maturity value = amount invested × (1 + rate)^5. Unlike a bank fixed deposit where you sometimes choose payout frequency, NSC has one mode — the interest is deemed reinvested each year and paid out entirely at maturity, except that the final year’s interest is treated as taxable in the year it accrues rather than deferred further.

Maturity table: ₹1,000 to ₹5 lakh invested

At the current 7.7% rate, over the fixed 5-year tenure:

NSC vs a bank fixed deposit

NSC’s biggest edge over a comparable bank FD is the tax treatment: NSC investments qualify for Section 80C deduction (up to the overall ₹1.5 lakh limit), which most bank FDs don’t unless specifically labeled a 5-year tax-saver FD. Where NSC loses ground is liquidity — it has no premature withdrawal option except in specific circumstances like the investor’s death, while many FDs allow premature withdrawal with a penalty. If you’re investing specifically for the 80C deduction and don’t need the money for 5 years, NSC is a straightforward, government-backed option. See your own numbers with our NSC Calculator.