Post Office NSC Scheme: Start with ₹1,000; earn up to ₹6.73 lakh in interest alone over 5 years!
Looking for safe and guaranteed returns? The Post Office National Savings Certificate (NSC) scheme offers an annual interest rate of 7.7%. Start investing with ₹1,000 and watch a deposit of ₹15 lakh grow to ₹21.73 lakh in 5 years. Learn about the tax benefits and the full calculation of returns for the NSC.
If you wish to invest money without the risks associated with the stock market, the Post Office National Savings Certificate (NSC) is an excellent option. It is one of the government’s small savings schemes. You can deposit a lump sum and receive the money back after a fixed tenure. Currently, it offers an annual interest rate of 7.7%.
Start with ₹1,000; no upper limit
A key feature of the NSC is that it does not require a large amount to start investing. You can begin with just ₹1,000, and subsequent deposits can be made in multiples of ₹1,000. There is no maximum investment limit for this scheme; if you have a large sum, you can invest more based on your needs and financial goals. However, it is not necessary to put all your savings into a single scheme simply for the lure of higher interest.
How much will the money grow in 5 years?
The maturity tenure for the NSC is 5 years. Interest is calculated on a compounding basis, meaning the interest earned on the deposit is also factored into future earnings. Typically, the entire amount is received as a lump sum upon maturity.
Understanding the fund calculation
At the current interest rate of 7.7%, an investment of ₹11.50 lakh could yield approximately ₹16.66 lakh after 5 years. Of this amount, approximately ₹5.16 lakh will come solely from interest. If a lump sum of ₹15 lakh is invested and left untouched for 5 years, the total maturity value could reach around ₹21.73 lakh; this means earnings of about ₹6.73 lakh would come from interest alone.
Please note that these figures are based on the current interest rate of 7.7%. Since the government may revise interest rates periodically, the actual amount could vary depending on the applicable rates and rules.
| Details | Investment 1 | Investment 2 |
|---|---|---|
| Total Investment Amount (Principal) | ₹11,50,000 | ₹15,00,000 |
| Annual Interest Rate (Compounded Annually) | 7.70% | 7.70% |
| Investment Tenure | 5 Years | 5 Years |
| Total Interest in 5 Years | ₹5,16,000 (Approx.) | ₹6,73,000 (Approx.) |
| Total Amount at Maturity | ₹16,66,000 (Approx.) | ₹21,73,000 (Approx.) |
Early withdrawal is not easy
The NSC is designed with a 5-year tenure. Under normal circumstances, premature closure is permitted only under limited conditions. Therefore, it is best to invest money that you will not need immediately for the next 5 years. Especially before investing a large sum, ensure you have a separate emergency fund in place.
Can also be purchased in the name of children
Investments in NSC can also be made in the name of children. A guardian can manage the account for a child under the age of 10. Additionally, adult investors can purchase NSCs in their own names. Parents might consider this savings option for their child’s future education or other financial needs. (Make investment decisions based on your specific requirements and, if necessary, consult a financial advisor.)
