Since you get a good profit on NSC, you might want to know how to calculate NSC interest. Well, firstly I should tell you that the interest rate of NSC is revised by the Government periodically. I will share with you a chart to show you how the interest rate has changed drastically over the years. Take a look below.
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| Period | Interest Rate (% per annum) |
January 2022 to March 2022 |
6.8% |
October 2021 to December 2021 |
6.8% |
July 2021 to September 2021 |
6.8% |
April 2021 to June 2021 |
6.8% |
January 2021 to March 2021 |
6.8% |
October 2020 to December 2020 |
6.8% |
July 2020 to September 2020 |
6.8% |
April 2020 to June 2020 |
6.8% |
January 2020 to March 2020 |
7.9% |
October 2019 to December 2019 |
7.9% |
July 2019 to September 2019 |
7.9% |
April 2019 to June 2019 |
8.0% |
January 2019 to March 2019 |
8.0% |
October 2018 to December 2018 |
8.0% |
Now that I have shared the interest rates, I will share with you how to calculate NSC accrued interest.
How to calculate NSC interest rate?
Since the NSC is calculated on compound interest, the interest you receive every year gets added as principal. The NSC is matured after a period of 5 years. The formula to calculate compound interest rate is:
A = P(1 + r/n)^ntA
=
final amount
P
=
initial principal balance
r
=
interest rate
n
=
number of times interest applied per time period
t
=
number of time periods elapsed
Suppose let’s say you have made an investment of Rs. 10,000 and the interest rate is 6.8% per annum. After one year you get an interest of Rs. 680. Now, Rs. 680 will be added to Rs. 10,000 and you will receive the interest on Rs. 10,680 now which will become 11,406 after a year.
Take a look at a chart for a better understanding.
Investment made- ₹10,000
Purchase date- 1st August 2019
Interest rate- 6.8% per annum
Lock-in Period- 5 years
| Year | Principal Sum (₹) | Yearly Interest at 6.8% (₹) | Aggregate Interest (₹) | Aggregate Amount (₹) |
1 |
10,000 |
680 |
680 |
10,680 |
2 |
10,680 |
726 |
1,406 |
11,406 |
3 |
11,406 |
776 |
2,182 |
12,182 |
4 |
12,182 |
828 |
3,010 |
13,010 |
5 |
13,010 |
885 |
3,895 |
13,895 |
This is the process of how to calculate interest on NSC certificates.
I hope you find my answer on how to calculate NSC interest informative.
Read more:
What is national saving certificate?
Is national saving certificate taxable
How to get loan against NSC?
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How to calculate NSC interest?
Diashinee
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2 Year
2022-08-18T10:31:14+00:00 2023-06-14T11:11:53+00:00Comment
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