NSC interest rate for October–December 2026
The National Savings Certificate (VIII Issue) pays 7.7% a year, compounded annually and paid at maturity. The Finance Ministry kept the rate unchanged for the October–December 2026 quarter, and it has stayed at 7.7% since April 2023. The rate you get is locked on the day you buy, so later changes do not affect certificates you already hold.
₹1,000 grows to ₹1,449.03 in five years
NSC maturity value at 7.7%
| Investment | Interest earned | Maturity value |
|---|---|---|
| ₹10,000 | ₹4,490 | ₹14,490 |
| ₹50,000 | ₹22,452 | ₹72,452 |
| ₹1,00,000 | ₹44,903 | ₹1,44,903 |
| ₹1,50,000 | ₹67,355 | ₹2,17,355 |
| ₹5,00,000 | ₹2,24,517 | ₹7,24,517 |
NSC tax benefits and taxation of interest
- Investment: deductible under Section 80C up to ₹1.5 lakh, in the old regime only.
- Interest for years 1 to 4: treated as reinvested, so it also qualifies for 80C in the old regime, while being taxable as income.
- Interest in year 5: taxable and not reinvested, so no 80C benefit.
- TDS: none. You declare the interest yourself under 'income from other sources', either every year (accrual basis) or at maturity.
Under the new regime there is no 80C, so NSC is simply a safe 7.7% fixed-income product with taxable interest. For someone in the 30% bracket, the post-tax return drops to about 5.3%.
Key features of NSC
- Minimum ₹1,000, in multiples of ₹100, with no upper limit.
- Five-year lock-in. Premature encashment is allowed only on death of the holder, forfeiture by a pledgee, or a court order.
- Can be bought at any post office or online through India Post's internet banking, single or joint (up to three adults), or for a minor through a guardian.
- Accepted by banks as collateral for loans, and transferable in limited cases.
- Backed by the Government of India, so there is no default risk.
NSC compared with other safe options
| Scheme | Rate (Oct–Dec 2026) | Lock-in | Interest tax |
|---|---|---|---|
| NSC | 7.7% | 5 years | Taxable |
| PPF | 7.1% | 15 years | Tax-free |
| Kisan Vikas Patra | 7.5% | 115 months to double | Taxable |
| Senior Citizens Savings Scheme | 8.2% | 5 years | Taxable |
| EPF / VPF | 8.25% (FY 2025-26) | Till retirement | Tax-free up to limits |
Frequently asked questions
What is the NSC interest rate now?
7.7% a year, compounded annually, for October to December 2026. The rate is fixed for the full five years on certificates bought during the quarter.
What is the maturity value of ₹1 lakh in NSC?
About ₹1,44,903 after five years at 7.7%, which means ₹44,903 of interest.
Is NSC interest taxable?
Yes, at your slab rate under 'income from other sources'. There is no TDS, and interest for the first four years can be claimed under 80C in the old regime because it is treated as reinvested.
Can I withdraw NSC before five years?
Only on the death of the holder, forfeiture by a pledgee, or a court order.
Is NSC useful under the new tax regime?
It still offers a guaranteed 7.7% with government backing, but without the 80C deduction its post-tax return is lower than it is for old-regime taxpayers.