HomeBlogUncategorizedHow To Buy An NSC?

How To Buy An NSC?

Do you invest in reducing your tax burden? Well, the Income Tax Act’s Section 80C offers several possibilities. The National Savings Certificate (NSC) programme is one such possibility. It is a Government of India programme to encourage resident Indians to save. Investors who invest in NSC are eligible for tax deduction under section 80C of up to INR 1.5 lakh.  The NSC interest rate calculator can be used to determine the interest earned.

What is A National Saving Certificate (NSC)?

The National Savings Certificate (NSC) programme provides fixed income. It is one of the most frequently used saving options in India. This programme can be activated at any Post Office. The Government of India is behind the NSC scheme. As a result, it ensures returns. This savings scheme promotes saving among those with low and moderate incomes. They can also get a tax benefit. The programme has a five-year lock-in period. It gives a fixed interest of 6.8%. 

NSC is a safe and low-risk instrument, just as other fixed-income products like PPF and Post Office FDs. The amount that can be invested in NSC is not capped. There is no TDS on NSC payouts. 

How to Buy an NSC?

A potential investor must go to the closest post office to purchase an NSC plan. They would require their original ID and proof of address. Investing in NSC can be facilitated by taking the following actions:

  • Obtain the application form and complete it with the necessary information.
  • Produce the original copies of your ID and proof of address for verification.
  • After your paperwork is verified, you can make the investment payment in cash, demand draft, or cheque to the postmaster.
  • Select a nominee and obtain a witness’s signature to finish the procedure.
  • Most importantly, NSC can only be invested in by Indian residents. The savings programme is not open to non-resident Indians (NRI), Hindu United Families (HUF), or trusts.

NSC Interest Calculator

The interest on your NSC investment is calculated using the following formula. 

A = P(1 + r/100)^n


  • A = Final value of the maturity
  • P = Principal invested amount 
  • r = Rate of interest offered
  • n = Number of years

To further grasp the formula, let us look at an example:

Consider investing INR 10 lakhs in a National Savings Certificate scheme with a 5-year term and a 6.8% interest rate. You will earn a total of INR 3,89,493 in interest by the end of five years. Your maturity value will be INR 13,89,493. If done manually, figuring NSC returns or the maturity value can be challenging and time-consuming. We can quickly estimate returns from NSC investments using an online NSC interest rate calculator, which makes the process efficient.

Benefits of Using an NSC Calculator

It can be arduous and time-consuming to calculate the interest and NSC maturity amount manually. The principal and the interest accrued are paid to the investor after five years. It makes sense that a shareholder would want to know how much their NSC investment has increased in value. An NSC calculator will assist in quickly calculating the maturity amount. The following are some benefits of using an NSC Interest calculator.

  • Simple to use: Using the NSC calculator is easy. The investor only needs to input the investment amount. The maturity amount is calculated as soon as the investor clicks on the ‘calculate’ tab.
  • Saving time: An investor can save time using a National Saving Certificate Calculator. Investors are spared the headache of performing calculations manually. Instead, the calculator carries out intricate computations in seconds.
  • Future planning: Accurate financial planning is possible for investors. By knowing the maturity amount in advance, investors can plan how much they need to invest. They can also plan other investments accordingly. 

Features of NSC

  • Small Investments: NSC accepts a minimum deposit amount of INR 100, making investing simple for everyone from different income groups. 
  • Fixed Income: NSC assures the account holder of a return. It generates a return of 6.8%. 
  • Maturity: The NSC scheme has a 5-year maturity period. Since December 2015, the 10-year maturity period scheme has been discontinued.
  • Compounding power: The interest generated on NSC during the investment period is reinvested in the plan, compounding returns for the investor.
  • Corpus after maturity: The total amount is paid to the account holder upon their account’s maturity. NSC payouts are free of TDS. When the investor receives their maturity amount, they should pay any applicable tax.
  • Loan Collateral: Premature withdrawals are not permitted by NSC. However, by using the NSC certificate as loan collateral, investors can obtain loans.
  • Early withdrawal: Early withdrawals are allowed, however, only under rare circumstances such as the passing of investors or by court order.
  • Nomination: The NSC programme enables the investor to choose any family member (even a minor) as their nominee. In the tragic event of the investor’s passing, the nominee can get the returns.

Tax Benefits of NSC Investment?

Under Section 80C of the Income Tax Act, investments in NSC up to INR 1.5 lakhs are eligible for tax exemption. The interest earned is added to the initial investment. It is also suitable for tax exemption.

For instance, an investor invested INR 5,000 in NSC. They are eligible for tax exemption on that initial investment in the first year. In the second year, they get tax exemption on their investment as well as the interest earned in the first year. 

Tax Deduction at Source (TDS) is not applied to NSC payouts. Investors must pay tax according to their income tax slab rate on the maturity amount.

Other Investment Alternatives 

To expand your portfolio, it is always a good idea to consider various investment alternatives. Thus, your risk is reduced, and your rewards are maximized. You can make investments in safer options like fixed deposits and government bonds. Consider investing in stocks if you have a high-risk tolerance. One of the rapidly growing investing opportunities enabled by technology is P2P lending. The fixed maturity peer-to-peer investment plan from LenDenClub offers annual returns of up to 10–12%* p.a. on your investment. 

LenDenClub is India’s largest alternate investment platform which started operations in India in 2015. We have been helping investors diversify their investments beyond traditional investment instruments ever since.



The Reserve Bank of India does not accept any responsibility for the correctness of any of the statements or representations made or opinions expressed by Innofin Solutions Private Limited, and does not provide any assurance for repayment of the loans lent through its platform.

LenDenClub is an Intermediary under the provisions of the Information Technology Act, 2000 and virtually connects lenders and borrowers through its electronic platform via the website and/or mobile app.

The lending transaction is purely between lenders and borrowers at their own discretion, and LenDenClub does not assure loan fulfilment and/or investment returns. Also, the information provided on the platform is verified or checked on the best efforts basis without guaranteeing any accuracy of the data/information verification. Any investment decision taken by a lender on the basis of this information is at the discretion of the lender, and LenDenClub does not guarantee that the loan amount will be recovered from the borrower, fully or partially. The risk is entirely on the lender. LenDenClub will not be responsible for the full or partial loss of the principal and/or interest of lenders’ investment amounts.


*P2P investment is subject to risks. And investment decisions taken by a lender on the basis of this information are at the discretion of the lender, and LenDenClub does not guarantee that the loan amount will be recovered from the borrower.

** Average value mentioned is the weighted average of returns received by investors

© 2023 LenDenClub by Innofin Solutions Private Limited | CIN: U74999MH2015PTC266499


Watch our latest commercial with Hardik Pandya.