NSC Calculator

What is the National Saving Certificate (NSC)?

National Savings Certificate NSC scheme is a fixed income scheme. It is one of the popular savings instruments in India. One can activate this scheme at any Post Office. NSC scheme is the Government of India initiative.

Hence it guarantees returns. This savings bond encourages small and mid-income investors to save. Additionally, they can also get a tax benefit. NSC investments up to Rs 1.5 lakhs is exempt from tax under Section 80C of the Income Tax Act. They come with a lock in period of 5 years. NSC certificates earn fixed interests. The current rate of interest is 6.8%. Like other fixed-income products PPF and Post Office FDs, NSC is also a secure and low-risk instrument. The minimum deposit is Rs 100. There is no maximum limit for investment in NSC. There is no TDS for NSC investments.

How does NSC Calculator work?

Interest for National Saving Certificate NSC is compounded half-yearly. The interest is payable to the investor at the end of the five years. The interest earned every year is reinvested. Let's take the example of Mr. Ashish. He wishes to invest INR 5,00,000 in an NSC at the current interest rate. Using NSC Interest calculator, we can calculate the maturity amount and the interest earned by him. We can follow the simple steps to calculate the maturity amount earned by Mr. Ashish.

Enter the amount of investment. In this case, it is ₹ 5,00,000

The term is already fixed at five years. This is because the NSC matures in 5 years.

The interest is fixed at 6.8 %. This is the current interest rate announced by the Ministry of Finance as of April 1st, 2020.

Once the values are entered, the NSC Interest Rate calculator calculates the maturity amount. It also calculates the investment made and interest earned.

In this case, the maturity value is ₹ 6,98,514.45.
The investment is ₹ 5,00,000.
The interest earned is ₹ 1,98,514.45.

Mr. Ashish's investment of ₹ 5,00,000 in NSC will earn an interest of ₹ 1,98,514.45 at the end of 5 years. The interest earned is taxable at the slab rate, Mr. Ashish falls.

Benefits of using an online NSC Calculator

Calculating the interest and maturity amount of NSC can be quite tedious and time taking. The interest is compounded half-yearly. The interest is added back to the investment.

At the end of 5 years, the interest plus the principal is payable to the investor. It is quite natural that an investor wants to know how much an investment in NSC has grown.

Dhan NSC calculator will help in calculating the maturity amount within seconds.

Here are a few advantages of using Dhan NSC Interest calculator.

Easy to use: The National Savings Certificate NSC Calculator is straightforward to use. All the investor has to do is enter the amount of investment. Once the investor clicks on calculate, it calculates the maturity amount.
Time-saving: Using a National Saving Certificate Calculator can save an investor's time. Investors don't have to go through the hassle of calculating manually. They perform complex calculations within seconds.
Accuracy: NSC calculator is built with precision. The calculations are always accurate.
Future planning: Investors can plan their financial future with accuracy. The NSC maturity calculator returns the exact amount their investment will reap upon maturity.
Free to use: Investors can use the NSC calculator multiple times for free of cost.

NSC Interest Rates & Maturity Period

The two types of NSC certificates are NSC VIII Issue and NSC IX Issue.

NSC VIII Issue – The VIII Issue comes with a maturity period of 5 years. The interest rate is 6.8% per annum.
NSC IX Issue – The IX Issue comes with a maturity period of 10 years. This issue has been discontinued since December 2015.

National Savings Certificates VIII Issue is an excellent scheme. The initial investment and the accrued interest for the first four years enjoy the benefit of Section 80C of Income Tax Act.

Features of National Savings Certificate (NSC)

Small Investments: NSC accepts investments as low as Rs 100. Making it easy for everyone to invest.
Fixed Income: NSC guarantees return to its account holder. They can enjoy a regular income.
Maturity Period: NSC schemes come with a maturity of 5 years. The 10-year maturity period issue has been discontinued from December 2015.
Power of Compounding: Interest earned on NSC during the investment tenure is reinvested into the scheme by default.
Corpus after maturity: The account holder receives the entire amount upon maturity. No TDS on NSC payouts. However, the investor should pay the applicable tax upon receiving the amount.
Loan Collateral: NSC doesn't allow premature withdrawals. However, it will enable investors to avail loans by having the NSC certificate as loan collateral.
Premature withdrawal: Premature withdrawals are not accepted for NSC investments. However, in exceptional cases like the death of investors or by court order, early withdrawals are acceptable.
Nomination: The NSC scheme allows the investor to nominate any family member (even a minor). The nominee can inherit the returns in an unfortunate event of the investor's demise.

What are the Tax Benefits of NSC Investment?

Investment in NSC is eligible for tax exemption under Section 80C of the Income Tax Act.
The interest earned during the tenure is added to the initial investment.
It is qualified for tax exemption as well.

For example, for an investment of ₹ 5,000 in NSC, the investor can claim for a tax benefit in the first year. From the second year onwards, the tax claim can include the interest earned on NSC in the previous year and the NSC investment made in the current assessment year.

There is no Tax Deduction at Source (TDS) for NSC investment payouts. However, investors have to pay. The tax is as per their income tax slab rates on the maturity amount.