NSC EXPLAINED: WHAT WILL BE YOUR PAYOUT AFTER 5 YEARS ON RS 1.5 LAKH INVESTMENT? INTEREST RATE, ELIGIBILITY AND TAX BENEFITS

For investors who prefer safety over risk, the National Savings Certificate (NSC) has long been a trusted savings option. Backed by the Government of India and available through post offices across the country, the scheme is designed for people who want stable returns along with tax benefits.

Unlike market-linked investments that fluctuate with volatility, NSC offers assured growth over a fixed period, making it a popular choice among conservative savers and first-time investors.

Interest rate and tenure

NSC currently offers an interest rate of 7.7 per cent per year, with annual compounding. While interest is calculated every year, investors receive the full amount only when the certificate matures. The interest earned during the first 4 years automatically gets added back to the investment, helping the corpus grow through compounding.

The scheme has a fixed tenure of 5 years, which suits medium-term goals such as education planning, creating a financial cushion, or balancing a portfolio with safe assets.

How much will Rs 1.5 lakh become after 5 years?

If an investor puts Rs 1.5 lakh in NSC and stays invested for the entire 5-year period, the amount gradually grows as interest keeps getting added each year.

At the current rate of 7.7 per cent, the maturity value comes to roughly Rs 2.2 lakh, or around Rs 220000 plus. The exact figure may vary slightly depending on the date of investment and the interest rate applicable at that time.

This predictability is one of the main reasons NSC remains attractive for people who want clarity about their returns from day one.

Investment limits

The minimum investment required is Rs 1,000, with additional deposits allowed in multiples of Rs 100. There is no upper ceiling on how much a person can invest, though tax deduction benefits under Section 80C are limited to Rs 1.5 lakh in a financial year.

Who can invest?

NSC is open only to resident Indian individuals. NRIs and HUFs are not eligible to invest. Accounts can be opened as a single holder, jointly with another person, or by a guardian on behalf of a minor. Children above 10 years can also hold accounts in their own name.

Investors are allowed to open multiple certificates based on their savings goals.

Tax benefits

One of the biggest advantages of NSC is its tax-saving feature. Investments qualify for deduction under Section 80C of the Income Tax Act. In addition, the interest earned each year, except in the final year, is treated as reinvested and also qualifies for deduction, giving investors extra tax efficiency.

(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions)

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2026-02-16T19:28:44Z