National Savings Certificate (NSC): What Is It & How to Invest

Explore NSC: Learn about NSC interest rates, eligibility, and how to apply for secure savings.
National Savings Certificate (NSC)
4 mins
07 March 2024

National Savings Certificate (NSC) has long been a preferred savings avenue for individuals looking for a secure and government-backed investment option. In this guide, we will explore the key features, benefits, and tax implications of investing in NSC, making it easier for you to make informed financial decisions.

What is National Savings Certificate (NSC)?

National Savings Certificate is a savings instrument offered by the Government of India to promote small savings among citizens. It is a fixed-income investment with a defined tenure, providing a safe and reliable way for individuals to invest. NSC interest rate is decided by the Government of India and revised every quarter. For the third quarter of FY 2023-24, the NSC interest rate is 7.7%.

Who should invest in NSC?

  • Risk-averse investors: NSC is an excellent choice for individuals who prioritise the safety of their investments. Being a government-backed instrument, it carries minimal risk, making it suitable for risk-averse investors.
  • Diversification: National Savings Certificates (NSC) can be an option for portfolio diversification, as it offers a low-risk investment opportunity. It is essential to consider the individual's overall financial goals, risk tolerance, and investment horizon before making decisions.
  • Tax-saving investors: Individuals looking to avail tax benefits can consider NSC. You can claim up to Rs. 1.5 lakh p.a. tax deduction under Section 80C of the Income Tax Act, offering a tax-efficient way to grow savings.

Additional read: How to Login EPFO

Benefits of NSC

  1. Safe and secure investment: The National Savings Certificate (NSC) is a secure investment option backed by the government, providing assurance to investors for both the invested amount and earned interest.
  2. Accessible to all: With a minimal entry requirement of just Rs. 100, NSC is accessible to a diverse range of individuals. This low entry barrier ensures that even small investors can actively participate in this savings scheme.
  3. Tax benefits: NSC investments qualify for tax benefits under Section 80C of the Income Tax Act. Investors can claim deductions for the principal amount invested, up to Rs. 1.5 lakh, helping in reducing their taxable income.
  4. Compounding growth: Interest on NSC compounds annually, fostering investment growth. The compounding effect allows investors to earn interest not only on the principal amount but also on previously earned interest.
  5. No limit on investment: NSC imposes no upper limit on investment amounts, making it suitable for those who are willing to invest large amounts.

Eligibility Criteria for NSC

  • Must be an Indian Citizen: Only Indian citizens are eligible to invest in National Savings Certificates (NSCs). Non-resident Indians (NRIs) cannot invest.
  • Individuals Only: NSCs are designed for individual investors. Entities like Hindu Undivided Families (HUFs), Trusts, and companies (private or public) are not eligible.
  • No Age Restrictions: There's no minimum or maximum age limit to purchase an NSC.

Tax benefits of NSC investment

While you can invest any amount in NSCs, only investments up to Rs. 1.5 lakh annually qualify for tax deductions under Section 80C of the Income Tax Act. Additionally, the interest you earn on the investment is compounded annually and reinvested and it is eligible for tax benefits as well. However, this benefit applies only for the first 4 years. The interest earned in the 5th year is not reinvested and is therefore taxed according to your income tax slab rate.

How to invest in NSC?

Steps to Invest in NSC Offline

  1. Get an NSC application form from your nearest post office or download it online.
  2. Fill in all required details on the application form.
  3. Self-attest copies of your KYC documents.
  4. Take the completed form, original documents for verification and pay the amount you want to invest.
  5. Once payment and verification are complete, you will receive your NSC

Steps to Apply for NSC Online

  1. Login to Department of Post's e-Banking website
  2. Go to the "General Services" section. Click on "Service Requests"
  3. Select "New Requests" and then "NSC Account – Open an NSC Account (For NSC)".
  4. Enter the amount you want to invest. Select the debit account linked to your Post Office savings account.
  5. Select "Click Here" link to read the terms and conditions. Accept them
  6. Enter your transaction password. Click "Submit."
  7. You can view and download the deposit receipt.
  8. Log back in and go to the "Accounts" section to see your new NSC account.

Documents required to apply for NSC

  1. Identification proof: You need to provide an original identification proof such as Passport, Permanent Account Number (PAN) Card, Voter ID, Driving licence, Senior Citizen ID, or Government ID for verification.
  2. Photograph: You will need to provide a passport-size photograph.
  3. Address proof: You will need to provide an address proof like electricity bill, Passport, telephone bill, bank statement along with a cheque.

Additional read: How to Download EPFO Passbook

Comparing NSC with other tax-saving Investments


National Savings Certificate (NSC)

Public Provident Fund (PPF)

Risk level



Interest rate

7.7% p.a. as of March 2024

7.1% p.a. as of March 2024

Lock-in period

5 years

15 years

Maximum investment limit


Rs. 1.5 lakh per year

Tax benefit under “Section 80C”



Maturity period and premature withdrawal under the NSC

Typically, you cannot withdraw money invested in an NSC before its 5-year maturity. However, there are a few specific exceptions where premature withdrawal is allowed:

  • Funds can be withdrawn in the event of the investor's death.
  • Withdrawal is allowed if an NSC is pledged as collateral, but only if the pledgee is a Gazetted Government Officer.
  • The invested amount can be withdrawn if a court of law mandates it.

How to request for a duplicate National Savings Certificate

Step 1: Fill Form NC-29, the application for duplicate certificates, available at any post office in India.
Step 2: Submit the filled-out form at the nearest post office branch. If the nearest branch is not the branch where the original certificate was issued, the application will be forwarded to the original branch by the new branch itself.
Step 3: The application should contain details of the NSC such as the amount, account number, date of issuance, and the reason for the duplicate NSC.
Step 4: If certificates are defaced or damaged, there is no need for an indemnity bond.
Step 5: However, there is a fee for reissuing the NSC in passbook form.

NSC vs Bajaj Finance Fixed Deposit



Bajaj Finance FD

Interest rate

7.7% p.a. as of March 2024

Up to 8.85% p.a.

Minimum investment

Rs. 1000

Rs. 15,000

Maximum investment

No maximum limit

Rs. 5 crore

Maturity period

5 years

12 months to 60 months


National Savings Certificate (NSC) is a secure investment option, offering guaranteed returns and tax benefits. It suits individual who prioritize safety and tax savings, and its simple process makes it accessible to various investors. NSC provides a reliable and government-backed choice for growing your savings.

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As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.