National Savings Certificate becomes better than Fixed Deposit in 2023. How much can you earn?

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National Savings Certificate interest rate 2023: The interest rates for NSC deposits increased in the first half of 2023. The scheme is now offering better interest rates than bank fixed deposits, PPF and Kisan Vikas Patra.

For the April-June quarter of FY 2023-24, the Finance Ministry increased the NSC interest rate to 7.7% from 7% in the previous quarter. There was no change in the NSC interest rate for the July-September quarter. However, the scheme still provides a better interest rate than most of the 5-year fixed deposit schemes offered by private and public sector banks.

Moreover, among all small savings schemes, the NSC is currently offering the third highest interest rate after SCSS (8.2%) and SSY (8%). The small savings schemes offering lower than the NSC interest rate are Public Provident Fund, Kisan Vikas Patra, Post Office RD, FD and Monthly Income accounts.

How much can you earn?

The NSC account matures in 5 years. You can invest any amount in this scheme, starting from a minimum of Rs 1000 and thereafter in multiples of Rs 100. However, there is no maximum limit on the amount that can be invested in an NSC account.

At the current 7.7% interest, an investment of Rs 10,000 will grow to Rs 14,490 on maturity. If you invest Rs 1 lakh in the NSC account now, you will get Rs 1,44,900 on maturity after 5 years.

Better than Fixed Deposit

Investors should know that NSC interest is compounded annually and investments up to Rs 1.5 lakh per year in this scheme also qualify for deduction under Section 80C of the Income Tax Act. The current interest rate of the NSC scheme makes it better than 5-year tax-saving fixed deposits offered by banks.

Even for amounts over Rs 1.5 lakh per year, the NSC scheme is better than fixed deposits as it is backed by the sovereign guarantee of the Government of India.

In April-June, the Government also increased interest rates for other small savings schemes like Senior Citizens Savings Scheme (SCSS), Sukanya Samriddhi Yojana, Kisan Vikas Patra, Post Office Fixed Deposits, Post Office Monthly Income Scheme and Post Office Recurring Deposit.


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