National Savings Certificates (NSC)

Features, Interest Rate & Maturity Calculation

National Savings Certificates (NSC)
National Savings Certificates (NSC)

Hi all, India Post offers various small saving schemes for Indian citizens. Some of the common saving schemes offered by India Post is PPF, KVP, NSC, RD, MIS, etc.

Here I am going to some brief about the benefits of NSC and the maturity calculation of the invested amount.

Who Should Invest in NSC?

The NSC offers guaranteed interest and complete capital protection, just like some other fixed income instruments – Public Provident Fund and Post Office FDs. However, they cannot deliver inflation-beating returns like tax saving Mutual Funds and National Pension Systems. Basically, the Government has promoted National Savings Certificate as a savings scheme for Indian individual citizens. Hence, below are not allowed to invest in NSCs

  • Hindu Undivided Families (HUFs)
  • Trusts,
  • Private and public limited companies
  • non-resident Indians (NRIs)

Features of NSC:

  • The maturity period is five years.
  • The minimum deposit that must be made towards the scheme is Rs.1,000. There is no maximum limit on the purchase of NSCs.
  • It is a tax-saving scheme, one can invest for up to Rs.1.5 lakh to claim the benefits under 80C deductions.
  • Banks and NBFCs accept NSC as a collateral or security for secured loans.
  • Investors can nominate a family member (even a minor) so that they can inherit it in the unfortunate event of the investor’s demise.
  • Though there is no maximum limit on the purchase of NSCs, only investments of up to Rs 1.5 lakh annually can earn the subscriber the tax savings under Section 80C of the Income Tax Act, 1961.

Interest Rate on National Savings Certificates (NSC):

The current rate of interest on NSC is 6.8% w.e.f. 01 July 2020, which the government of India revises every quarter. It gets compounded annually but will be payable at maturity.

Maturity value calculation of NSC:

To calculate the maturity value of Fund invested in NSC saving scheme, one has to use the NSC Calculator.

Most of the NSC Calculator for maturity value calculation requires some data like: NSC investment amount, present rate of interest, Period in months (i.e. 60 months) and also require interest Compounding Frequency (i.e. Annual). After calculation, one will get the Maturity Amount of his National Savings Certificates (NSC) investment after the maturity period

Tax benefits of NSC investment

Investments of up to Rs.1.5 lakh in the National Savings Certificate can earn the subscriber a tax rebate under Section 80C. Furthermore, the interest earned on the certificates is also added back to the initial investment and qualify for a tax break as well. For instance, if you purchase certificates worth Rs.1,000, you are eligible for a tax rebate on that initial investment amount in the first year. But in the second year, you can claim a tax deduction on the NSC investment(s) that year as well as the interest earned in the first year. This is because the interest is added to the original investment and compounded annually.

How & Where can you buy it?

Earlier, physically pre-printed NSC certificates were issued by banks or Post Offices. However, the same has been discontinued w.e.f 01-July-2016. Presently, the certificates can be,

  • Recorded in two modes namely e-mode (electronic mode) or in Passbook mode.
  • Purchased from all Public Sector Banks and top three Private Banks (ICICI, HDFC & Axis)

If you have a Savings account with Bank/Post office, you can buy NSC certificates in e-mode, provided you have access to internet banking. It can be bought by an investor for self or on behalf of minor or with another adult as a joint account.


Now that you know all about NSC and its benefits , you can most definitely say that this secure and low-risk product is for the risk- averse investors. Those who seek safety of capital or investors who are looking to diversify their portfolio through fixed return instrument then this is the scheme for you to invest.

Maddy Sam
See all posts by Maddy Sam