NSC (National Savings Certificate) - Interest Rate 2025-26 & Tax Saving Benefits

The National Savings Certificate (NSC) is a secure investment option provided through post offices. Interest rate fixed for Q1 of FY 2025-26 is 7.7% per annum. A minimum investment is Rs. 1,000 is required to open an NSC account and lock in period is for 5 years . Tax benefits of up to Rs. 1.5 lakh is available under section Section 80C of the Income Tax Act.

What is National Savings Certificate?

• The National Savings Certificate (NSC) is a fixed-income investment scheme that can be opened with any post office branch.
• This is an initiative by the Government of India mainly for small to mid-income investors.
• Anyone looking for a 
  • safe investment avenue 
  • steady interest 
  • and tax savings on taxes can choose to invest in NSC. 

Investment Limits - Key Information

A person can start investing in NSC with a minimum investment of Rs. 1,000 and with no maximum limit. However, the investment will be locked-in for 5 years i.e., it cannot be withdrawn before the completion of 5 years.

You can invest in NSC from the nearest post office in your name, for a minor or with another adult as a joint account. NSC comes with a fixed maturity period of five years. There is no maximum limit on the purchase of NSCs.

Who can Invest in NSC?

• The person must be an Indian citizen.
• An individual should be aged more than 10 years.
• This scheme is only for individuals,  Hindu Undivided Families (HUFs) and trusts cannot invest in it. 
• The scheme is open only for individual Indian residents. Non-resident Indians (NRI) cannot purchase NSC certificates. 

Features & Benefits of NSC

NSC Interest Rate History

NSC Interest Rates are periodically reviewed by the Ministry of Finance, leading to revisions every quarter. Interest on NSC is compounded annually and disbursed upon maturity. Below is a chart depicting the historical NSC interest rates from previous years:

How to Invest in NSC?

• Currently, certificates can be bought either by electronic mode (e-mode) or Passbook mode.
• While the passbook method is unpopular and comparatively more tedious, you can effortlessly buy an NSC scheme with a savings account at an authorized bank or post office. 
• It is important to note, however, that you would require to activate your internet banking to do the same.

How to Invest in NSC Offline

To invest in NSC offline, follow the listed steps:  

Step 1: Collect the NSC application form online or at any post office. 

Step 2: Fill out the form with all the details. 

Step 3: Submit the form with self-attested copies of the required KYC documents.  

Step 4: Take the original documents for verification and pay the amount you want to invest.

Step 5: Upon approval, collect the NSC of your application.  

How to Apply for NSC Online

Step 1: Open Department of Posts (DOP) net banking and log in. 

Step 2: Under 'General Services', select 'Service Requests'. 

Step 3: Click on 'New Requests' and choose ‘NSC Account – Open an NSC Account (For NSC)’. 

Step 4: Enter the deposit amount and choose the debit account linked to the PO savings account. 

Step 5: Choose ‘Click Here’ to run through the terms and conditions. Accept them once done. 

Step 6: Enter the transaction password and click on ‘Submit’. 

Step 7: The deposit receipt will be there to view and download. 

Step 8: Login and click on 'Accounts' to view the details of your NSC account.

Documents Required to Apply for NSC

Investors are required to submit:

• Identity proof, such as a passport, permanent account number (PAN) card, driver's license, senior citizen ID, or any other official government identification
• Photograph.
• Address proof, like electricity bill, passport, phone bill, or bank statement.

Comparing NSC with Other Tax-saving Investments

NSC is one of the tax-saving investment options available under Section 80C of the Income Tax Act, 1961. The other popular options are Equity Linked Savings Schemes (ELSS), National Pension System (NPS), Public Provident Fund (PPF) and Tax-Saving Fixed Deposits (FD). The table below compares NSC with other tax-saving investments:   

NSC Calculator - Calculate National Savings Certificate Interest Online

How to Request for a Duplicate National Savings Certificate

You can seek a duplicate if your original NSC certificate is lost, stolen, destroyed, damaged, or mutilated.

Simply complete and return the Duplicate Savings Certificates form to the post office that issued the NSC that needs to be replaced.

The following are the form's key fields:

1. Serial numbers, denominations, NSC issue, and other information regarding the certificate(s).
2. The purchase date of the certificates.
3. The objective for filing for a duplicate certificate, together with additional details, must be indicated. 

How To Redeem NSC After Maturity?

Upon maturity, the NSC can be encashed at any Post Office branch and not necessarily at the branch where the account is held. 

If you want to withdraw the money from a branch that is not your account’s home branch, you will have to submit an application with details, such as serial number, issue date, full name, registered and current address. 

When you want to encash the maturity amount, you have to carry the following documents with you:

• Original NSC certificate 
• Identity proof
• NSC encashment form
• The person entitled to receive the encashment must sign behind the certificate after receiving the payment

Final Word

Making investments depends on the risk appetite of the investor. One should consider all the risks and rewards associated with the investment and know enough information about the scheme. This article will provide you the relevant information about National Savings Certificate (NSC) scheme and everything one must be aware about.