National Savings Certificate (NSC): Top 21 Benefits You Must Know

National Savings Certificate (NSC): Top 21 Benefits You Must Know

What is National Savings Certificate (NSC)?

The National Savings Certificate (NSC) is a fixed income saving scheme offered by the Government of India under the India Post umbrella. Designed primarily for small and mid-level investors, NSC encourages savings while offering tax benefits under Section 80C of the Income Tax Act, 1961.

This scheme is highly popular among risk-averse individuals due to its government-backed guarantee, assured returns, and ease of investment. NSC is also a favorite among those seeking a medium-term investment option with tax advantages.

---

Key Features of National Savings Certificate in 2025

• ✅ Backed by the Government of India
• ✅ Fixed Interest Rate (compounded annually)
• ✅ 5-Year Maturity Period
• ✅ Minimum Investment: ₹1,000 (no maximum limit)
• ✅ Available at all India Post branches
• ✅ Eligible for tax deduction under Section 80C
• ✅ Transferable across post offices
• ✅ Nomination facility available

---

Interest Rate on NSC – April to June 2025

The interest rate for NSC (Q1 FY 2025-26) is 7.7% per annum, compounded annually but payable at maturity.

Period	Interest Rate	Compounding	Maturity Value (for ₹1,000)
Apr-Jun 2025	7.7% p.a.	Annually	₹1,446.22 after 5 years

💡 Rates are subject to quarterly revisions by the Ministry of Finance. Always check the official source before investing.

---

National Savings Certificate Eligibility Criteria

Anyone who meets the following can invest in NSC:

• Indian resident individuals (single or jointly)
• Guardians on behalf of minors
• Trusts and HUFs are not allowed
• NRIs are not eligible to invest

---

Documents Required to Buy National Savings Certificate

To purchase NSC, the following documents are mandatory:

1. Aadhaar Card (Mandatory)
2. PAN Card
3. Passport-size photo
4. Duly filled NSC application form
5. Proof of Address (Utility Bill, Passport, Voter ID, etc.)

---

Step-by-Step Guide to Invest in NSC

Here’s how you can start investing in NSC in 2025:

1. Visit your nearest post office.
2. Fill out the NSC Application Form (Form-A).
3. Submit KYC documents (Aadhaar, PAN, address proof).
4. Choose investment amount (min ₹1,000).
5. Make payment via cash/cheque/postal savings account.
6. Receive a passbook or e-certificate as proof of investment.

---

Where to Buy National Savings Certificate

You can buy National Savings Certificate from:

• Any Department of Posts / India Post branch
• Online through India Post Internet Banking (for registered users)
• Mobile app facility (to be launched soon)

---

Tax Benefits of National Savings Certificate

Investments in National Savings Certificate qualify for:

• Deduction under Section 80C (Up to ₹1.5 lakh per year)
• Interest earned is taxable, but it is deemed reinvested (except for the final year)

Year	Tax Deduction Status
Year 1 to 4	Interest reinvested → qualifies under 80C
Year 5	Interest is paid → taxable income

---

NSC Maturity and Withdrawal Process

• NSC matures in 5 years.
• You get the full maturity amount including compounded interest.
• Withdrawal before maturity is not allowed except:
  • Death of holder
  • Court order
  • Forfeiture by pledgee (like bank)

📝 You must submit Form-2 and original certificate/passbook to withdraw.

---

NSC vs Fixed Deposit: Which is Better?

Feature	NSC	Fixed Deposit
Backing	Govt. of India	Banks
Lock-in	5 Years	Flexible
Tax Benefit	Yes (80C)	Only in Tax Saver FDs
Interest	7.7% (Apr-Jun 2025)	6.5–7% (varies by bank)
Risk	Very Low	Low

Verdict: If you want tax benefits + guaranteed returns, NSC scores better.

---

NSC vs PPF vs SCSS: Comparative Chart

Feature	NSC	PPF	SCSS
Tenure	5 years	15 years	5 years
Interest	7.7%	7.1%	8.2%
Tax on Interest	Taxable	Exempt	Taxable
Tax Deduction	80C	80C	80C
Age Limit	None	None	60+ only

---

How to Redeem NSC Online or Offline

• Offline: Visit the post office with original certificate, ID proof, and filled withdrawal form.
• Online (India Post eBanking):
  • Login to Internet Banking
  • Select “NSC Closure”
  • Follow steps and confirm withdrawal
  • Funds are transferred to linked account

---

Can NRIs Invest in NSC?

As per current laws, NRIs are not permitted to invest in NSC. However, if an individual has invested in NSC while being a resident and later becomes an NRI, they can hold the certificate till maturity but cannot extend or renew.

---

NSC Transfer, Nomination, and Premature Withdrawal Rules

• Transferable: Only once before maturity between individuals.
• Nomination: Mandatory at the time of investment. Can be updated later.
• Premature Withdrawal: Only under specific circumstances like:
  • Death
  • Court direction
  • Pledge to banks/authorities

---

Advantages of NSC for Salaried Individuals

1. Tax saving under 80C
2. Assured return without market risk
3. Encourages long-term disciplined savings
4. Can be used as collateral for loans
5. Great for retirement corpus planning

---

Risks & Limitations of Investing in NSC

• No market-linked returns
• Tax on interest income
• No liquidity until maturity
• Fixed 5-year lock-in period

Despite the above, for conservative investors, NSC remains a top pick.

---

Real-Life Example: NSC Return Calculator 2025

Let’s say you invest ₹1,00,000 in NSC in April 2025 at 7.7% p.a.

Year	Interest Earned	Total Value
Year 1	₹7,700	₹1,07,700
Year 2	₹8,288	₹1,15,988
Year 3	₹8,931	₹1,24,919
Year 4	₹9,619	₹1,34,538
Year 5	₹10,391	₹1,44,929

Total Maturity Amount: ₹1,44,929

---

Expert Tips for NSC Investors

• Combine NSC with PPF for balanced tax-saving portfolio.
• Use NSC to plan future milestones like children’s education.
• Always retain proof of investment (certificate/passbook).
• Don’t forget to claim annual interest as reinvestment under 80C.
• For higher security, link NSC with a joint holder.

---

Latest NSC Updates by India Post

• NSC now available in e-mode certificates.
• Quarterly updates in interest rates.
• NSC can be purchased using post office mobile banking (launch expected in late 2025).
• Instant KYC verification for online purchase.

---

FAQs – National Savings Certificate (2025)

Q1. What is the lock-in period for NSC?
A: NSC has a lock-in of 5 years.

Q2. Is the interest earned from NSC tax-free?
A: No. Interest is taxable, but reinvested interest (first 4 years) qualifies under 80C.

Q3. Can I take a loan against NSC?
A: Yes. Banks accept NSC as collateral for personal loans.

Q4. What happens if I lose the NSC certificate?
A: You can apply for a duplicate certificate at the issuing post office with ID proof.

Q5. Can NSC be prematurely withdrawn?
A: Only under specific conditions like death, court order, or pledging.

Q6. How can I check the maturity value of my NSC?
A: Use the NSC calculator available on India Post’s official website or mobile app.

---

Conclusion: Should You Invest in NSC in 2025?

If you’re looking for a secure, tax-saving instrument that offers guaranteed returns, then NSC is a smart bet. While the interest is taxable, the safety net of a government-backed scheme and easy availability make NSC ideal for conservative investors, salaried individuals, and long-term planners.

Always compare NSC with similar options like PPF or SCSS based on your financial goals.