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

National Savings Certificate

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.

PeriodInterest RateCompoundingMaturity Value (for ₹1,000)
Apr-Jun 20257.7% 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)
YearTax Deduction Status
Year 1 to 4Interest reinvested → qualifies under 80C
Year 5Interest 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?

FeatureNSCFixed Deposit
BackingGovt. of IndiaBanks
Lock-in5 YearsFlexible
Tax BenefitYes (80C)Only in Tax Saver FDs
Interest7.7% (Apr-Jun 2025)6.5–7% (varies by bank)
RiskVery LowLow

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


NSC vs PPF vs SCSS: Comparative Chart

FeatureNSCPPFSCSS
Tenure5 years15 years5 years
Interest7.7%7.1%8.2%
Tax on InterestTaxableExemptTaxable
Tax Deduction80C80C80C
Age LimitNoneNone60+ 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.

YearInterest EarnedTotal 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.

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