Due to the Reserve Bank of India’s recent repo rate cuts, many banks have reduced interest rates on fixed deposits.
If you’re looking for a long-term investment with higher returns, consider investing in the Post Office’s National Savings Certificate (NSC) scheme instead of a bank FD.
The NSC offers better interest rates and tax benefits. Here’s how much return you can expect when investing amounts ranging from ₹1,00,000 to ₹5,00,000.
1. NSC Interest Rate
The Post Office’s National Savings Certificate offers a 7.7% interest rate, with a 5-year investment tenure.
2. Return on ₹5,00,000 Investment
If you invest ₹5,00,000 in NSC, you’ll earn ₹2,24,517 in interest at the 7.7% rate. The maturity amount after 5 years will be ₹7,24,517.
3. Return on ₹4,00,000 Investment
An investment of ₹4,00,000 in NSC will earn you ₹1,79,614 in interest, with a total maturity amount of ₹5,79,614.
4. Return on ₹3,00,000 Investment
By investing ₹3,00,000 in NSC, you’ll earn ₹1,34,710 in interest. The maturity amount will be ₹4,34,710.
5. Return on ₹2,00,000 Investment
If you invest ₹2,00,000, you will receive ₹89,807 as interest, with a total maturity amount of ₹2,89,807.
6. Return on ₹1,00,000 Investment
A ₹1,00,000 investment in NSC will grow to ₹1,44,903 at the 7.7% interest rate. The interest earned will be ₹44,903.
7. Tax Benefits
Investing in NSC qualifies for tax deductions under Section 80C of the Income Tax Act. The minimum investment is ₹1,000, and there is no upper limit for investments.
8. Who Can Open an NSC Account
Anyone can open an NSC account, including minors above 10 years of age.
There is also a facility for joint accounts, and guardians can invest on behalf of minors or individuals with unsound minds. NSC can be transferred from one person to another during the tenure.
9. Premature Closure Rules
The NSC has a 5-year maturity period. Once you invest, the interest rate remains fixed for the entire duration.
Premature closure is not allowed, except under special circumstances such as the death of the account holder or a joint account holder, or if ordered by the government or a court.
