Individuals who invest in the National Savings Certificate (NSC) scheme can easily calculate the amount of money they will receive at maturity. Individuals can enter basic details and find out the maturity amount by using various online calculators.
NSC Interest Rate
Currently, the interest rate offered by the scheme is 6.8% p.a., and the interest is compounded on a yearly basis. However, the interest amount is payable only at the time of maturity. The Government of India decides the rate of interest and revises it on a quarterly basis. The interest that is generated gets reinvested automatically. However, the returns that are generated will not beat inflation.
Calculation of Interest
In case individuals are calculating the interest online, the below-mentioned details must be entered in the NSC calculator:
- The date when the certificate was purchased.
- The amount that has been invested in the scheme.
The rate of interest will be filled automatically depending on when the certificate was purchased.
Given in the table below is an example of how interest is calculated, and the amount individuals will receive at the time of NSC maturity:
Assumptions
Investment: Rs.1,00,000
Date of Purchase: 1 July 2019
Rate of Interest: 6.8% p.a.
Lock-in Period: 5 years
| Year | Investment Amount (Rs.) | Interest Generated for the year (Rs.) | Total Interest Generated (Rs.) | Total Amount (Rs.) |
|---|---|---|---|---|
| 1 | 1,00,000 | 7,900 | 7,900 | 1,07,900 |
| 2 | 1,07,900 | 8,524 | 16,424 | 1,16,424 |
| 3 | 1,16,424 | 9,198 | 25,622 | 1,25,622 |
| 4 | 1,25,622 | 9,924 | 35,546 | 1,35,546 |
| 5 | 1,35,546 | 10,708 | 46,254 | 1,46,254 |
Therefore, the total amount that the individual will receive at the time of maturity is Rs.1,46,254. The total interest that is generated for investments in the scheme over a period of 5 years is Rs.46,254.
Features of NSC
The main features of the scheme are mentioned below:
- Income is fixed
- NSC Tax benefits are provided
- Rate of interest is high
- Easy to access as the scheme is available in post offices across India
- Compounding interest
- Entire maturity value will be received
- Small investments can be made
- Maturity period of 5 years and 10 years
- NSC can be provided as collateral for loans
- Nominations can be added
- Premature NSC withdrawal is allowed under certain conditions
