NSC Calculator

What is NSC?

NSC, or National Savings Certificate, is a government-backed investment option for the general public. The aim behind the NSC scheme was to provide low to medium-income sections of people with a low-risk and consistent return investment option. Section 80C of the Income Tax Act exempts NSC investments up to INR 1.5 lakhs from taxable income

NSC scheme has a 138-year-old history in India and is the oldest financial instrument under the government saving bonds. NSC scheme was incorporated by the Britishers in India. Their main aim behind the scheme was to arrange the funds for the ongoing world war at that time. This scheme did not gain any popularity among the people as nobody was interested in pooling their savings to fund a war.

After the independence, the government needed the funds for the nation’s development. In 1948, the National Savings Organisation was renamed to the National Savings Institute under the Ministry of Finance. It conceived the importance of the National Savings movement to emphasize the need for domestic savings for national development.

The NSC scheme has a lock-in period of 5 years. The interest rate on the NSC scheme is determined by the Government of India on a quarterly basis. Generally, NSC gives more returns and safety than a conventional bank FD.

You can start an NSC account with as little as INR 1,000 & there is no maximum limit. Also, for NSC investments, no TDS is deducted. You can open an NSC account in your nearby post office.

What is the NSC calculator?

An NSC calculator is a financial tool that helps you calculate the future value of your NSC investment.

Pocketful’s online NSC calculator offers a beginner-friendly interface that even a school student can use easily.

You are required to enter details such as the yearly investment amount and interest rate. In the NSC calculator, you might have noticed that the investment period is set at default of 5 years as the minimum lock-in period for NSC investment is 5 years. The interest is compounded annually and credited to the holder’s account.

How does an NSC calculator work?

The working of the NSC calculator is based on the simple compounding formula.

The formula is given below-

A= P(1+R)^5

A	Maturity amount
P	Principal amount
R	Interest rate

Let’s understand it with an example:

Suppose, Mr Sam wants to invest INR 50,000 in the NSC scheme. He knows that the lock-in period is five years & the current interest rate offered by NSC is 7.

Mr. Sam wants to know the maturity amount of his investment for which he uses Pocketful’s NSC maturity calculator. He enters 50,000 in the “Investment Amount” and then enters the interest rate, i.e., 7%.

And voila! The maturity amount after 5 years is INR 70,128.

Benefits of using Pocketful’s NSC accrued interest calculator

• Estimated returns: The NSC calculator helps you to know the estimated returns of your investment at the time of maturity.
• Easy Comparison: Using an online investment calculator helps to compare different investment options with each other. So, you can invest in the best-suited option according to your risk appetite.
• Easy to use: Online calculators are easy to use as they offer a very user-friendly interface. That makes it very interactive to use.

Who should invest in NSC?

The NSC scheme is similar to other investment options like the Public Provident Fund (PPF), Post Office FDs, and other Post Office investment options. Investment in NSC is backed by the Govt. of India which is considered as the safest investment option in India.

NSC is most suited to Risk-averse Investors who are looking for higher returns than conventional bank FDs along with tax benefits.

The eligibility criteria to obtain an NSC certificate in India is given below:

• Indian residents (Joint account up to 3 adults) can invest in the NSC scheme, NRIs (Non-Residents of India) are not eligible to invest in NSC.
• There is no age limit to park funds under the NSC scheme. Any individual resident of the country can do so.

However, HUF (Hindu Undivided Family) trusts and private/public limited companies are not eligible to invest in the NSCs.

Benefits of investing in the NSC scheme

There are multiple benefits of investing in the NSC scheme:

• Tax benefits: The principal amount invested is eligible for deduction up to INR 1.5 lakh under section 80C of the Income Tax Act, 1961.
• Transfer benefits: NSC certificates are easily transferable from one investor to another. Only one transfer is allowed per maturity period. The certificate remains the same just the name of the investor gets updated. Further, one can also transfer the NSC account from one post office to another.
• Secured and risk-free investment: NSC is backed by the government of India, and investment options which are backed by the Sovereign Guarantee considered as the safest instruments.
• No tax deductions at the source: There will be no tax deductions at the source while crediting the maturity amount to the investor’s account.