NSC Interest Rate 2026: Returns, Maturity & 80C Benefit Explained
The National Savings Certificate (NSC) is a government-backed, fixed-return scheme available at post offices — popular for its safety and its section 80C tax benefit. This guide explains the current interest rate, how the 5-year compounding works, what a typical investment grows to, and how NSC compares with a tax-saving FD.
The current NSC interest rate
NSC rates are reset by the government every quarter. Recently the rate has been 7.7% per year, compounded annually. Importantly, the rate that applies when you buy a certificate stays fixed for its entire 5-year term — later rate changes don't affect a certificate you already hold.
How NSC returns are calculated
- Term: 5 years (fixed lock-in).
- Compounding: Annual, but interest is paid at maturity, not yearly.
- Reinvestment: Each year's interest (except the final year) is treated as reinvested and counts toward your 80C deduction.
Worked example: ₹1 lakh at 7.7%
Invest ₹1,00,000 in NSC at 7.7% compounded annually. After 5 years it grows to about ₹1,44,900. You get nothing during the term, then principal plus all accrued interest together at maturity. Because the rate is locked at purchase, you know your exact maturity amount up front.
| Investment | Rate | Approx. maturity (5 yrs) |
|---|---|---|
| ₹50,000 | 7.7% | ~₹72,450 |
| ₹1,00,000 | 7.7% | ~₹1,44,900 |
| ₹1,50,000 | 7.7% | ~₹2,17,350 |
Calculate your NSC maturity
Open the NSC Calculator, enter your amount and the current rate, and see the maturity value and total interest. To compare against other 80C options, try the PPF Calculator or the FD Calculator.
Frequently Asked Questions
What is the current NSC interest rate?
The National Savings Certificate rate is set by the government each quarter and has recently been 7.7% per year, compounded annually but paid at maturity. Because it can change every quarter, confirm the latest rate before investing.
How much will ₹1 lakh become in NSC after 5 years?
At 7.7% compounded annually over 5 years, ₹1,00,000 grows to roughly ₹1,44,900 at maturity. The exact figure depends on the rate applicable when you buy the certificate, which stays fixed for that certificate's full term.
Is NSC interest paid every year?
No. NSC interest is compounded annually but is paid out only at maturity, along with your principal. The interest accrued each year (except the last) is deemed reinvested and qualifies for 80C in that year.
Does NSC qualify for tax deduction under 80C?
Yes. Your NSC investment qualifies for a deduction under section 80C up to the overall ₹1.5 lakh limit. The interest is taxable, but since it is reinvested each year (except the final year), it also counts toward 80C in those years.
NSC or tax-saving FD — which is better?
Both have a 5-year lock-in and 80C benefit. NSC rates are government-set and often competitive, and there is no TDS on NSC interest, whereas bank FDs may deduct TDS. Compare the current NSC rate with FD rates using a calculator before deciding.
Try the NSC Calculator