National Savings Certificates (NSCs) are long-term investment schemes provided by the Government of India via post offices and authorized banks. They offer a fixed interest rate backed by the government, making them a secure investment choice. NSCs usually have a maturity period of 5 years, making them ideal for long-term financial planning.
The interest rate for the National Savings Certificate (NSC) is currently 7.7% per annum. This rate is compounded annually and paid out at maturity. The Government of India revises the NSC interest rate on a quarterly basis.
Highlights of National Saving Certificate (NSC) Scheme
The table below shows the overview of National Saving Certificate Scheme
Minimum Deposit₹1000
| Interest rate | 7.70% p.a. |
| Tenure | 5 years |
| Maximum Deposit | No limit |
| Tax Benefit | Up to ₹1.5 lakh under section 80C |
Note: The interest rates and other information are subject to change as per the government. It is advised to check before applying for NSC.
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National Saving Certificate (NSC) Interest Rate History
The Ministry of Finance periodically reviews NSC interest rates, resulting in quarterly revisions. Interest on NSC is compounded annually and paid out when it matures. The chart below shows the historical NSC interest rates from previous years.
| Financial Year | April-June | July-September | October-December | January-March |
|---|---|---|---|---|
| 2023-2024 | 7.7% | 7.7% | 7.7% | 7.7% |
| 2022-2023 | 6.8% | 6.8% | 6.8% | 7.0% |
| 2021-2022 | 6.8% | 6.8% | 6.8% | 6.8% |
| 2020-2021 | 6.8% | 6.8% | 6.8% | 6.8% |
| 2019-2020 | 8.0% | 7.9% | 7.9% | 7.9% |
| 2018-2019 | 7.6% | 7.6% | 8.0% | 8.0% |
| 2017-2018 | 7.9% | 7.8% | 7.8% | 7.6% |
| 2016-2017 | 8.1% | 8.1% | 8.0% | 8.0% |
Comparing NSC Interest Rate with Other Tax-saving Investments
NSC falls under Section 80C of the Income Tax Act, 1961, offering tax-saving investment options. Other well-known options include Equity Linked Savings Schemes (ELSS), National Pension System (NPS), Public Provident Fund (PPF), and Tax-Saving Fixed Deposits (FD). The following table provides a comparison of NSC with other tax-saving investment choices.
| Investment | Interest | Lock-in Period | Risk Profile |
|---|---|---|---|
| NSC | 7.7% p.a. | 5 years | Low-risk |
| ELSS funds | 15% to 18% p.a. | 3 years | Market-related risks |
| PPF | 7.1% p.a. | 15 years | Low-risk |
| NPS | 9% to 12% p.a. | Till retirement | Market-related risks |
| Tax-Saving FD | 6% to 8.25% p.a. | 5 years | Low-risk |
From the above table, we understand that,
- High-risk investments: like ELSS funds and NPS offer potentially higher returns but come with market-related risks.
- Low-risk investments: like NSC, PPF, and Tax-Saving FDs provide stable returns but with lower growth potential.
- Investment horizon: is crucial, as longer lock-in periods (like PPF and NPS) are generally associated with lower-risk options.
Hence, the optimal choice depends on an individual’s risk tolerance, financial goals, and investment horizon.
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National Saving Certificate (NSC) Eligibility Criteria
You can invest in the National Savings Scheme if you meet the following eligibility criteria for NSC.
- Must be an Indian resident.
- Adult individuals or a group of up to three adults may invest jointly.
- Guardians can invest on behalf of a minor or a person with a mental disability.
- Minors over the age of 10 can invest.
Individuals Not Eligible For NSC
- Non-Resident Indians (NRIs) are not eligible to invest in NSC.
- Trusts and Hindu Undivided Families (HUFs) cannot participate in NSC with the only exception of the Karta of HUFs.
Documents Required for NSC
To invest in NSC, individuals must provide certain documents, including proof of identity, proof of address, and a completed application form. Having these documents ready will facilitate a smooth and secure investment process. Ensure you have the following:
- Completed NSC application form
- Valid identity proof (e.g., Aadhaar Card, Driver’s License, PAN card)
- Valid address proof (e.g., utility bill, Passport, Aadhaar Card)
- Recent passport-size photograph
- Investment amount in cash or cheque
NSC Calculator
An NSC calculator helps you estimate the maturity amount and interest earned on your National Savings Certificate (NSC) investment. By inputting the initial investment amount and the applicable interest rate, the calculator quickly calculates the total return you can expect at the end of the 5-year lock-in period. This tool is useful for financial planning and making informed investment decisions.
National Savings Certificate Calculator
Check more on National Saving Certificate from the links below:
| NSC Tax Benefits | NSC Premature Withdrawal |
| NSC Rules and Guidelines | Documents Required for NSC |
| Post Office NSC | NSC Post Office Application Form |
| NSC Maturity Certificate | NSC as Security for Your Loans |
| NSC Transfer Online | NSC Calculator |
Compare NSC with other investment options from below:
Steps to Invest in National Saving Certificate (NSC)
Here are the steps to invest in National Saving Certificate (NSC) online and offline.
Steps to Invest in NSC Online:
- Step 1: Account Requirement: Ensure you have an active savings account with a bank or post office that supports NSC e-transactions.
- Step 2: Access Internet Banking: Log in to your internet banking portal.
- Step 3: Initiate Investment: Navigate to the investment or tax-saving schemes section.
- Step 4: Select NSC Option: Choose to open an NSC account or purchase NSCs.
- Step 5: Provide Details: Enter your savings account number, investment amount, and beneficiary.
- Step 6: Confirm Transaction: Review and confirm; the amount will be debited, and the NSC certificate will be linked to your account.
- Step 7: View NSC Details: Check your NSC investment details through your internet banking portal.
Steps to Invest in NSC Offline:
- Step 1: Visit Post Office: Go to your nearest post office and request the NSC application form (Form-1).
- Step 2: Fill Out Form: Complete the form with your details, investment amount, and beneficiary.
- Step 3: Submit KYC Documents: Provide self-attested identity and address proof copies; bring originals for verification.
- Step 4: Make Investment: Choose cash or cheque to deposit the investment amount as instructed.
- Step 5: Receive NSC Certificate: Obtain the physical NSC certificate as proof of your investment.s
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Besides NSC, you can also check and invest in other saving schemes with better returns. Check the table below with links for details: