How does the NSC interest rate compare to other government schemes?

The interest rate on National Savings Certificates (NSC) is competitive when compared to other government-backed savings schemes like the Public Provident Fund (PPF) and the Senior Citizens Savings Scheme (SCSS). Each of these schemes has its own features and rates, catering to different investor needs.

Current Comparison (as of the latest updates):

• NSC: Offers an interest rate of up to 7.7%, compounded annually.
• PPF: Provides an interest rate of up to 7.1%, compounded annually, but with a longer lock-in period.
• SCSS: Offers a rate of up to 7.4% for senior citizens, compounded quarterly, making it an attractive option for senior citizens.

For example, if you invest ₹1,00,000 in NSC at an interest rate of 7.7%, you will earn ₹7,700 annually.

Comparatively, a PPF investment of the same amount would yield ₹7,100 annually, which is lower. You can also use an NSC calculator to learn about the maturity amount.

When evaluating these schemes, it's essential to weigh factors such as:

• Liquidity Needs: NSC is suitable for those who need access to funds in a shorter time frame, while PPF is more for long-term savings.
• Investment Horizon: Your financial goals and how long you plan to keep your money invested will also influence your choice.

By understanding the comparative interest rates and features of these schemes, investors can make informed decisions that align with their financial goals.