Looking for a stable and risk-free way to grow your savings? The National Savings Certificate (NSC) has been one of India’s most trusted investment avenues for decades. Backed by the Government of India, NSC offers guaranteed returns, fixed tenure, and tax-saving benefits under Section 80C, making it a preferred choice for conservative investors.
What is National Savings Certificate (NSC)?
The National Savings Certificate (NSC) is a fixed-income savings instrument designed to encourage small and medium investments among citizens. It provides a secure, low-risk investment option with a lock-in period of 5 years. The NSC interest rate is reviewed quarterly by the Government of India. For Q2 of FY 2025-26 the rate stands at 7.7% per annum.
NSC scheme key highlights
Feature |
Details |
Interest rate |
7.7% per annum |
Minimum investment |
Rs. 1,000 |
Lock-in Period |
5 years |
Risk profile |
Low risk |
Tax benefit |
Up to Rs.1.5 lakh under Section 80C |
While NSC guarantees fixed returns, a Bajaj Finance Fixed Deposit (FD) offers similar security with up to 7.30% p.a. interest, giving you flexibility in choosing tenures and payout options. Open FD account.
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.
If you are seeking flexibility beyond tax-saving schemes, a Bajaj Finance FD lets you invest Rs. 15,000 onwards and choose tenures from 12 to 60 months, helping you plan both short- and long-term goals. Check latest rates.
Benefits of NSC
Feature |
Description |
Fixed income |
Offers assured returns since the interest rate remains constant throughout the tenure. |
Tax deductions |
Up to Rs. 1.5 lakh can be claimed under Section 80C. Interest earned in the first four years is reinvested and also qualifies for deduction. In the fifth year, interest is not reinvested and is taxable. |
Minimum & maximum investment |
Minimum investment starts at Rs. 1,000 (in multiples of Rs. 100). There is no maximum investment limit. |
Maturity period |
The scheme matures in 5 years. |
Access |
Available at post offices and authorised banks after completing KYC. Certificates can be transferred between branches and can also be opened online. |
Loan collateral |
Accepted as collateral for secured loans by banks and NBFCs. A transfer stamp from the postmaster is required. |
Nomination |
Investors can nominate any family member, including minors. |
Corpus at maturity |
The full maturity amount is paid out. No TDS is deducted, but the investor must pay applicable tax on interest. |
For investors who prefer capped tenures with assured liquidity, Bajaj Finance FDs provide predictable earnings with monthly, quarterly, half-yearly or annual payouts. Book an FD.
Also Read: How to login on EPFO Portal
National Savings Certificate (NSC) Interest Rate
The current NSC interest rate is 7.7% per annum for Q2 FY 2025-26, revised by the government every quarter. The interest compounds annually but is paid out only at the time of maturity.
NSC interest rate history
The Ministry of Finance periodically reviews and adjusts the National Savings Certificate (NSC) interest rates each quarter. Interest on NSCs is compounded annually and paid out at maturity. Below is a chart showing the historical interest rates for NSCs from previous years:
Financial Year |
April-June |
July-September |
October-December |
January-March |
2023-2024 |
7.7% |
7.7% |
7.7% |
7.7% |
2022-2023 |
6.8% |
6.8% |
6.8% |
7.0% |
2021-2022 |
6.8% |
6.8% |
6.8% |
6.8% |
2020-2021 |
6.8% |
6.8% |
6.8% |
6.8% |
2019-2020 |
8.0% |
7.9% |
7.9% |
7.9% |
2018-2019 |
7.6% |
7.6% |
8.0% |
8.0% |
2017-2018 |
7.9% |
7.8% |
7.8% |
7.6% |
2016-2017 |
8.1% |
8.1% |
8.0% |
8.0% |
Also Read : NSC Withdrawal Rules 2025
Eligibility Criteria for NSC
- Indian citizens only: NRIs cannot invest.
- Individuals only: HUFs, trusts, and companies are not eligible.
- No age restrictions: Open to all individuals regardless of age.
Tax benefits of NSC investment
Listed below are a few tax benefits of NSC investment:
- Investments up to Rs. 1.5 lakh annually qualify under Section 80C.
- Interest earned is reinvested and also qualifies for deductions for the first 4 years.
- Interest in the final year is taxable as per your income tax slab.
If you want tax-free maturity instead of partial taxation, consider diversifying into Bajaj Finance FDs, which offer clear post-tax earnings visibility. Invest now!
