What is National Savings Certificate (NSC)?
NSC, National Savings Certificate, is a fixed-income savings scheme that you get from the post office. Its main purpose is to provide a safe investment option to small and medium income investors.
The government updates its interest rate every three months and for the first quarter of the current financial year 2025‑26, it is 7.7% per annum.
Why choose NSC? A look
- Available interest rate – 7.7% per annum (Q1 FY 2025‑26)
- Minimum investment – Only ₹1,000, and no upper limit
- Lock-in period – Five years, i.e. the money will be locked for five years
- Risk – Very low or almost nil
- Tax benefit – Up to ₹1.5 lakh benefit under section 80C
This scheme is best for investors who:
- Want to protect their capital
- Want stable and realistic interest
- And want to save taxes
Full-detailed description of NSC
1. Minimum and maximum investment
- Minimum investment ₹1,000 (in multiples of ₹100)
- No upper limit, as long as it fits in your 80C limit
2. Interest payment
Interest is compounded annually, but it is paid after five years 1. Interest on maturity
Interest for the first four years can optionally be reinvested and is also included in the taxable limit
3. Lock-in period
Withdrawals are not allowed for five years — except in certain circumstances, such as:
- Death of investor
- Order under court order
4. Purchase process
- Offline: Must bring passbook, signature, photo identity and complete KYC
- Online: Can be easily purchased through post office/bank net banking
5. Loan
Many banks and NBFCs accept NSC as security, but the original copy must be stamped by the post master
6. Nomination option
The person you choose is legally eligible to take NSC in your name, whether he is an adult or a minor
7. Amount on maturity
On completion of lock-in, the entire amount along with interest will be automatically credited, and TDS will not be deducted — tax is your responsibility
8. Undisclosed purchases
This is applicable only to Indian citizens, individuals—HUFs, trusts or NRIs cannot join the scheme
Lessons learned from interest rate history
Government reports show that interest rates have been changing year after year—reviewed every quarter:
| Financial Year | April–June | July–September | October–December | January–March |
|---|---|---|---|---|
| 2024–25 | 7.7% | – | – | – |
| 2023–24 | 7.7% | 7.7% | 7.7% | 7.7% |
| 2022–23 | 6.8% | 6.8% | 6.8% | 7.0% |
| 2021–22 to 2020–21 | 6.8% (all quarters) | |||
| 2019–20 | 8.0% | 7.9% | 7.9% | 7.9% |
| 2018–19 | 7.6% | 7.6% | 8.0% | 8.0% |
Rates have fluctuated over the years, but the current rate of 7.7% is attractive to many investors.
NSC vs Other Tax-Saving Investments (Section 80C):
| Investment Option | Interest/Return | Lock-in Period | Risk |
|---|---|---|---|
| NSC | 7.7% p.a. | 5 years | Low |
| ELSS | 12–15% p.a. (Share-Market Based) | 3 years | High Risk |
| PPF | 7.1% p.a. | 15 years | Low |
| NPS | 8–10% p.a. (Market Based) | Till retirement | Medium–High |
| Tax-Saving FD | 7–8% p.a. | Less than 5 years | Low |
NSC is ideal for investors who:
- Wish to avoid risk
- Are looking for safer options rather than investing in stocks or funds
- And want tax benefits in a short time
How to invest in NSC?
A. Offline Process:
- Go to the post office and fill the application form
- Submit along with KYC (like Aadhaar, PAN, Address)
- Pay the amount and get NSC on receipt
- Get a ticket for refund on maturity after five years
B. Online Process (via Net Banking):
- Login to the net-banking of the post department
- Go to ‘General Services’ or ‘Service Requests’ section
- Select ‘Open NSC Account’ in ‘New Requests’
- Select the amount and make payment from debit account
- Read and approve the terms and conditions
- Download the receipt after the transaction is successful
- Go to the ‘Accounts’ section and check the status of NSC
Documents required for NSC
- Recognized photo ID (like PAN, Passport, Driving License, Voter ID)
- Address Proof (Electricity Bill, Bank Statement, Phone Bill, Ration Card)
- Passport size photo
- Completed application form
How to get duplicate NSC What to do?
If your NSC is lost, burnt or damaged, then:
- Fill the ‘Duplicate Certificate’ form
- Submit it to the concerned post office
- Follow the guidelines for new certificate
💰 How to get the amount on maturity of NSC?
- You can demand the amount after five years from any post office
- If you are doing this from any post office other than your upload branch, then apply in writing, which includes serial number, date of issue, name and address
- Carry original NSC, identity proof, claim form
- Sign the back of the NSC after receiving the payment
Final Conclusion
NSC is an investment option that gives you:
- Safe and stable interest (7.7% P.A.)
- Five years lock-in
- Tax savings of ₹ 1.5 lakh (in section 80C)
- Capital protection of ten lakhs
- Useful security in bank loans
For these reasons, it has become a favorite and wise option for millions of small to medium income investors.
If you are looking for a risk-free, protected and tax-saving instrument, then NSC Investment can be a good solution.
