NSC calculator — the 80C reinvestment loophole.
National Savings Certificate (VIII Issue) — 7.7% compounded annually, 5-year lock-in. Commonly used as a fixed-income 80C alternative. The hidden trick: interest accrued in years 1-4 is "deemed reinvested" and also eligible for 80C in that year — effectively giving you bonus 80C deduction on top of the principal. Only the final year's interest is taxable.
Your NSC
Q4 FY26 rate: 7.7%. Compounded annually, paid at maturity. ₹100 minimum, no maximum. 80C-eligible + reinvested interest (years 1-4) also 80C-eligible.
Year-by-year compounding
| Year | Interest accrued | Running balance | 80C eligible |
|---|---|---|---|
| 1 | ₹38,500 | ₹5.38 L | Yes — reinvested |
| 2 | ₹41,465 | ₹5.80 L | Yes — reinvested |
| 3 | ₹44,657 | ₹6.25 L | Yes — reinvested |
| 4 | ₹48,096 | ₹6.73 L | Yes — reinvested |
| 5 | ₹51,799 | ₹7.25 L | No — taxable |
The NSC quirk:interest earned in years 1-4 is "deemed reinvested" and you can claim it under 80C in THAT year's return (on top of the principal 80C). Only the final year's interest is taxable at slab. Huge hidden tax benefit most people miss.
NSC vs PPF vs tax-saver FD
- • NSC (7.7%, 5-yr) — highest-yielding fixed-income 80C. Shorter lock-in than PPF. Interest taxable only at maturity.
- • PPF (7.1%, 15-yr) — lower rate, much longer lock-in, but EEE (fully tax-free at maturity).
- • Tax-saver FD (6.5-7.5%, 5-yr) — comparable tenure, lower rate, interest fully taxable. Dominated by NSC for most taxpayers.
- • SCSS (8.2%, 5-yr, 60+) — higher rate but only for seniors + quarterly payout.
Typical rationale: < 60 years + want short lock-in + comfortable with deferred tax → NSC. < 60 years + longest possible lock-in + want EEE → PPF. 60+ + want quarterly income → SCSS.
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Research tool · not investment advice.
Axel Markets is an information + analytics product. We are not a SEBI-registered Research Analyst (RA) or Investment Adviser (IA). Nothing on this page is a buy, sell, or hold recommendation. Past performance is not indicative of future returns. Verify all data against the authoritative source (NSE, BSE, AMFI, SEBI, company RHP / factsheet) before acting. NSC rate is revised quarterly. Q4 FY26 is 7.7%. Only the final-year interest is taxable; years 1-4 interest is deemed reinvested and eligible for 80C that year (a legal quirk — use it).