New Delhi: There are certain Post Office schemes that are helping people realise their dreams of amassing significant wealth. These schemes carry absolutely no risk, meaning you can earn substantial returns without any exposure to market volatility. You have likely heard of the Post Office’s National Savings Certificate (NSC) scheme; it is an excellent option for investors.
The NSC is one of the Post Office’s small savings schemes. It allows you to deposit a lump sum and receive the accumulated amount after a fixed tenure. Interest on the NSC is calculated on a compounding basis, meaning the interest earned on the deposit is reinvested and generates further earnings. Currently, the scheme offers an annual interest rate of 7.7%.
If an individual invests a lump sum of ₹11.50 lakh and does not withdraw the funds for five years, the amount could grow to approximately ₹16.66 lakh. This results in earnings of around ₹5.16 lakh solely from interest.
Key Features of the National Savings Certificate
The Post Office National Savings Certificate (NSC) is a unique scheme that offers the potential for impressive returns. It does not require a massive initial investment; investors can start with as little as ₹1,000. Subsequent deposits can easily be made in multiples of ₹1,000.
There is currently no upper limit on the investment amount for this scheme. If you have a large sum available, you can invest a higher amount based on your specific needs and financial goals. However, it is not mandatory to put your entire savings into a single scheme to earn the prevailing interest rate.
Returns After 5 Years
The NSC has a maturity period of five years. Interest is calculated on a compounding basis, and the total accumulated amount is typically paid out upon maturity. Consequently, maintaining the investment for the full term allows the interest earnings to grow significantly. For instance, assuming an annual interest rate of 7.7%, an investment of ₹11.50 lakh could grow to approximately ₹16.66 lakh over five years. This comprises the principal investment of ₹11.50 lakh and total proceeds of around ₹16.66 lakh.
Income on an investment of ₹15 lakh
If a lump sum of ₹15 lakh is invested in the National Savings Scheme at an annual interest rate of 7.7% and held for five years, the total maturity amount could reach approximately ₹21.73 lakh. This allows for an easy earning of ₹6.73 lakh in interest on the principal investment of ₹15 lakh.
The scheme offers the benefit of compound interest, meaning the interest accrued each year is included in subsequent calculations. Please note that this calculation is based on the current interest rate of 7.7%; the actual amount may vary depending on the applicable interest rate and scheme rules.
