National Savings Certificate
Government-backed schemes like the National Savings Certificate can help you save for your future needs with minimal risk. These schemes are designed to offer a stable way to grow your savings while ensuring guaranteed returns. Let’s explore this scheme further so you can determine whether it is a good fit for your financial planning.
What is National Savings Certificate (NSC)?
The National Savings Certificate is a fixed-income investment scheme offered by the Government of India. It is available at post offices across the country. These accounts have a maturity period of five years. To open an account, the minimum deposit is ₹ 1,000, and subsequent investments can be made in multiples of ₹ 100. There is no upper limit on the amount you can invest.
A National Savings Certificate account can be opened by an adult for themselves or for a minor. Minors who are 10 years or older can also open an account. The scheme offers a guaranteed interest. The current interest on the National Saving Certificate is 7.7%.
Who is eligible to invest in national savings certificate?
Only individual Indian citizens can invest in the National Savings Certificate. This includes adults who wish to open an account for themselves or on behalf of a minor. A minor can also open an account independently once they reach the age of 10.
Hindu Undivided Families (HUFs) and Non-Resident Indians (NRIs) are not eligible to invest in NSC.
What are the features and benefits of the national savings certificate?
Below are some features and benefits of the National Savings Certificate:
- Maturity period: The account comes with a fixed five-year term. At maturity, you receive the full amount along with the interest earned
- Minimum and maximum investment: You can start investing with a minimum of ₹ 1,000 and thereafter in multiples of ₹ 100. There is no upper limit, so you can invest as much as you are comfortable with
- Tax benefits: Investments in NSC qualify for deduction of up to ₹ 1.5 lakh per financial year subject to the conditions prescribed under Section 80C^ of the Income Tax Act, 1961
- Loan facility: You can pledge your investment as collateral for a loan from banks or financial institutions
- Interest and compounding: Interest is compounded annually. Each year’s interest is reinvested to ensure that your money grows more efficiently over time. The total interest is paid at maturity.
What has been the trend of the NSC interest rate in India?
Below are the National Saving Certificate interest rates over the last few financial years:
| Financial year | April to June | July to September | October to December | January to March |
|---|---|---|---|---|
| FY 2019-2020 | 8.0% | 7.9% | 7.9% | 7.9% |
| FY 2020-2021 | 6.8% | 6.8% | 6.8% | 6.8% |
| FY 2021-2022 | 6.8% | 6.8% | 6.8% | 6.8% |
| FY 2022-2023 | 6.8% | 6.8% | 6.8% | 7.0% |
| FY 2023-2024 | 7.7% | 7.7% | 7.7% | 7.7% |
Who should invest in national savings certificate?
The National Savings Certificate can be used by:
- Low-risk investors: Ideal for individuals who prefer safety over high returns
- Medium-term savers: Suitable for those saving for goals that are about five years away
- Parents and guardians: Can invest on behalf of minors to build a secure financial base
- Minors: Minors aged 10 years or older can use the account to build savings
- Tax-saving individuals: Those looking to reduce taxable income under Section 80C^ of the Income Tax Act, 1961
What documents are required to invest in NSC?
To open a National Savings Certificate account, you need the following documents:
- Identity proof: This can include a PAN Card, passport, driving licence, Aadhaar Card, voter ID or any other officially valid document
- Address proof: This can include a utility bill, passport, bank statement and or any other officially valid document
- Photograph: A recent passport-sized photo
COMP/DOC/Sep/2025/169/1154
Frequently Asked Questions
How to apply for NSC online?
Below are the steps to apply for the National Savings Certificate:
- Log in to the Department of Posts (DOP) internet banking portal
- Go to ‘General Services’
- Select ‘Service Requests’
- Click on ‘New Requests’
- Choose ‘NSC Account – Open an NSC Account (For NSC)’
- Enter the deposit amount you wish to invest (minimum of ₹ 1,000) and select the linked post office savings account
- Click on ‘Click Here’
- Read the terms and conditions and select ‘Accept’
- Enter your transaction password and click ‘Submit’
Your application will be submitted.
What are the tax benefits provided by National Savings Certificates?
Investments made in the National Savings Certificate qualify for deductions subject to the conditions prescribed under Section 80C^ of the Income Tax Act, 1961. You can claim a deduction of up to ₹ 1.5 lakh per financial year on the amount invested.
How to redeem NSC after maturity?
Once your National Savings Certificate matures after five years, you can encash it at any post office branch by following these steps:
- Visit the post office branch where you want to redeem your money
- Submit the following documents:
- Original National Savings Certificate
- Identity proof
- Encashment form
What are the maturity period and premature withdrawal rules for NSC?
The maturity period for the National Savings Certificate is five years. Premature withdrawal is generally not allowed, but it can be done under the following conditions:
- Death of the account holder for single accounts or any/all account holders in case of joint accounts
- Order by a court of law
- Forfeiture by a pledgee, such as a gazetted officer
What is the current interest rate in NSC?
The current interest on the National Saving Certificate is 7.7%.
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