National Saving Certificate Interest Rate 2024 & NSC Calculation

Post Office National Saving Certificate or NSC Interest rate is 7.7% for current quarter of October to December 2024. This interest rate is reviewed by Government of India every quarter and can be updated in upcoming quarters. Remember that interest in National Saving Certificate is calculated based on fixed interest rate, which means, even though the interest rate changes in future, but you will get same interest rate throughout the tenure of 5 years when you have issued the National Saving Certificate or NSC.

Table of Contents

National Saving Certificate Calculator Video
What is National Saving Certificate
National Saving Certificate (NSC) Benefits
Income Tax Benefits in National Saving Certificate
- PPF vs NSC Interest Calculation – Which is Better? – Video
What is the tenure of NSC (National Saving Certificate)?
Is NSC better than FD?
Is NSC Interest rate fixed for 5 years?
What is compounding in NSC?
Conclusion

Let us understand the benefits and Interest calculation in National Saving Certificate.

National Saving Certificate Calculator Video

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As seen above, you can easily calculate interest in National Savings Certificate using the NSC Calculator. Based on the deposit amount and interest rate, the NSC interest will be calculated every month and compounded on annual basis.

What is National Saving Certificate

National Saving Certificate or NSC are the certificates issued by Post Office to save for your financial goals
These are low risk investment scheme to get fixed interest amount
NSC scheme is for the tenure of 5 years. This means the deposit amount will be locked for 5 years from the issue of this certificate
Minimum amount you can invest is Rs. 1000 and there is no maximum limit to issue NSC certificate
You can have multiple NSC certificates issued against your name
It helps you to save income tax under Section 80C that has a maximum limit of Rs. 1.5 lakh with old tax regime
Remember that new tax regime does not allow deduction with NSC certificates
NSC certificates are physical certificates having the details amount investment amount, interest rate, tenure and maturity amount
You can get the maturity amount encashed or transferred in bank account after maturity. Failing to do so will help you earn interest for next 2 years at post office savings account interest rate, post which you will not earn any interest
The interest portion of maturity amount in NSC is taxable as per your tax slab rates

Let us now understand the benefits of NSC.

National Saving Certificate (NSC) Benefits

Below are some of the benefits of National Saving Certificate:

Income Tax Saving: NSC or National Saving Certificate helps you to save income tax with old tax regime under Section 80C. This means you can claim maximum of Rs. 1.5 lakh in the financial year by investing in NSC
High Interest Rate: The current interest rate in NSC is 7.7% for October to December 2024 quarter, which is high compared to other saving schemes such as Fixed Deposits and Recurring Deposits
Achieve Financial Goals: NSC helps you to achieve your financial goal of 5 years. Since NSC accepts one time investments, you can deposit the amount and get interest amount after 5 years along with your principal amount.

Income Tax Benefits in National Saving Certificate

National Saving Certificate provides you the income tax benefits under Section 80C with old tax regime.

This means you can deposit Rs. 1.5 lakh in a financial year, to issue this certificate and claim deduction with Section 80C. Note that this deduction is not available with new tax regime.

Apart from this, the interest amount you’ll receive after 5 years of NSC tenure will be taxable. So you can reinvest this interest amount again to claim deduction with Section 80C in upcoming financial years.

Watch below video to understand the difference between PPF and NSC and which sis a better investment scheme for you.

PPF vs NSC Interest Calculation – Which is Better? – Video

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What is the tenure of NSC (National Saving Certificate)?

The tenure of NSC is 5 years. So the deposit you make in this certificate will be locked in for 5 years.

After 5 years, you can get the principal and interest amount from NSC certificates in your savings account.

Is NSC better than FD?

It depends on various factors to compare NSC with FD and let us try to do so with below points:

Items	National Saving Certificate (NSC)	Fixed Deposits (FD)
Income Tax	Helps in Saving Income Tax under Section 80C	5 year tax saver Fixed Deposit also helps in saving income tax with Section 80C
Liquidity	Difficult to break NSC certificates before 5 years but can be done based on some conditions	You can easily break or liquidate FD before 5 years
Account opening online	Currently it involves offline process of buying certificate via Post Office	You can easily open FD via net banking of your Savings account Bank
Compounding	Yearly compounding is done based on deposit	Quarterly compounding which gives you more interest amount
Interest rate	Current interest rate is 7.7%	Interest rate varies between 6.5% to7.5% based on the bank
Maturity amount (@7.7% interest rate)	You’ll get Rs. 72,452 on Rs. 50,000 deposit in NSC after 5 years	You’ll get Rs. 73,212 on Rs. 50,000 deposit in Fixed Deposit after 5 years

NSC vs FD comparison which is better

As seen in above table, Fixed deposits are better compared to NSC if we see the liquidity, account opening steps and compounding factors. FD gives you more interest amount due to quarterly compounding, provided you get FD interest rate higher than NSC.

NSC is better in terms of interest rate, and can help you get yearly compounding

ALSO READ: FD Interest Calculation for 10 Years

Is NSC Interest rate fixed for 5 years?

Yes NSC interest rate is fixed for the certificate you issue for the next 5 years. So, the interest rates of post office schemes are updated every quarter, but this does not impact the interest rate on existing NSC certificates that are issued already to you.

You’ll get the same interest rate in NSC throughout the tenure of 5 years.

What is compounding in NSC?

Compounding means you get interest amount on already earned interest. Based on the interest calculation every month for first financial year, the interest is summed up for all months in FY and added to your principal amount. This means in upcoming financial years, you’ll earn more interest amount on this already earned interest.

Conclusion

So to summarize, National Saving certificate current interest rate is 7.7%, which will be reviewed by government of India every quarter. Your deposit amount will be locked in for 5 years and you’ll earn monthly interest in NSC where as compounding will be done on yearly basis.

NSC provides you income tax benefits under Section 80C and maximum of Rs. 1.5 lakh can be claimed under old tax regime.

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Income Tax Calculator App – FinCalC

For Income Tax Calculation on your mobile device, you can Download my Android App “FinCalC” which I have developed for you to make your income tax calculation easy.

What you can do with this mobile App?

Calculate Income Tax for new FY 2024-25 and previous FY 2023-24
Enter estimated Investments to check income tax with Old and New Tax Regime
Save income tax details and track regularly
Know how much to invest more to save income tax
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