How NSC maturity is calculated
NSC compounds annually for a fixed 5-year tenure, and the entire maturity value — principal plus all accrued interest — is paid out only at the end:
The rate used is whatever was notified when you bought the certificate, and it stays fixed for that certificate's full term even if the government revises the rate in later quarters for new investors. Small-savings rates are notified quarterly by the Finance Ministry; the next notification, for the October–December 2026 quarter, is due by 30 September 2026. The current 7.7% has been unchanged since April 2023.
Worked example: ₹1,00,000 at 7.7%
At the current 7.7% rate, ₹1,00,000 invested in NSC grows to ₹1,44,903 after 5 years, earning ₹44,903 in total interest. Enter today's notified rate above for your own numbers, since the rate is reviewed every quarter.
NSC maturity value for common amounts at 7.7%
Every rupee in NSC grows by the same 44.9% over the 5-year term at 7.7%, so the maturity value scales exactly with the deposit. The table is computed from the current notified rate — use the calculator above for any other amount or rate.
| Investment | Maturity after 5 years | Total interest |
|---|---|---|
| ₹10,000 | ₹14,490 | ₹4,490 |
| ₹50,000 | ₹72,452 | ₹22,452 |
| ₹1,00,000 | ₹1,44,903 | ₹44,903 |
| ₹1,50,000 | ₹2,17,355 | ₹67,355 |
| ₹2,00,000 | ₹2,89,807 | ₹89,807 |
| ₹5,00,000 | ₹7,24,517 | ₹2,24,517 |
| ₹10,00,000 | ₹14,49,034 | ₹4,49,034 |
The Section 80C angle — and its distinctive double benefit
Your NSC investment qualifies for a Section 80C deduction (old tax regime only), within the overall ₹1,50,000 annual 80C cap shared with PPF, ELSS, and other instruments. What makes NSC unusual is what happens to the interest: in years 1 through 4, the interest earned is not paid to you — it is deemed reinvested into the certificate. Because it is treated as a fresh investment, that same reinvested interest separately qualifies for another 80C deduction each of those years (again subject to the overall cap). Only the final year's interest is paid out in cash, and it does not get a fresh 80C deduction since there is no reinvestment.
Taxability — no TDS, but declare it every year
All NSC interest, including the amounts deemed reinvested, is taxable at your income-tax slab rate as "income from other sources." You must declare it in your ITR every year it accrues, not just at maturity. Unlike some other instruments, no TDS is deducted by India Post or banks on NSC interest — the full tax responsibility sits with you.
Minimum investment and premature withdrawal
NSC has a minimum investment of ₹1,000, then multiples of ₹100, with no upper limit. It can be bought singly, jointly, or by a guardian for a minor. Premature withdrawal is not generally allowed — exceptions are limited to the holder's death, forfeiture by a pledgee (such as a bank the certificate is pledged to), or a court order.
How to buy NSC — post office counter or online
NSC is sold at every post office: fill in the account-opening form, attach KYC (Aadhaar, PAN, address proof and a photograph — Aadhaar and PAN are now standard KYC for post office schemes) and make the deposit by cash, cheque or a debit from your post office savings account. If you already have a post office savings account with DOP internet banking, you can open an NSC online — General Services → Service Requests → New Requests → "NSC Account – Open" — and the certificate is issued electronically, with the nominee copied from your linked savings account. Certificates can be held singly, jointly (two or three adults) or by a guardian for a minor, and can be pledged as collateral for a loan from a bank or housing-finance company.
What happens at maturity
After 5 years the full maturity value is paid into your post office savings account or by cheque; NSC has no renewal or extension option. If you leave the amount unclaimed, it earns interest only at the Post Office Savings Account rate (4% at present) for up to 2 years after maturity, and nothing beyond that. To keep the money in NSC you buy a fresh certificate at whatever rate is notified at that time — worth comparing with the other post office schemes first.
NSC vs the alternatives
Compare NSC against KVP, which guarantees doubling but skips the 80C deduction entirely, and against PPF, whose 15-year EEE structure makes its interest completely tax-free — usually the stronger choice if you can lock money away that long. For a monthly-income alternative in retirement, see the SCSS calculator, or browse all options on the post office schemes page.