The National Savings Certificate (NSC) is one of India’s oldest and most trusted savings instruments. You buy an NSC for a fixed amount, hold it for 5 years, and receive your principal plus compound interest at maturity. The interest is reinvested automatically each year, so you benefit from compounding — but only collect at the end.
NSC is particularly tax-efficient: your investment qualifies for 80C, and the interest reinvested each year also qualifies for 80C (except in the final year). For high-income individuals, this makes the effective post-tax yield significantly higher than the stated rate.
Who Should Invest?
- Taxpayers looking for 80C investments with guaranteed, sovereign-backed returns
- People who don't need regular income and can wait 5 years for maturity
- Investors who want to pledge the certificate as loan collateral
Key Features
- Section 80C deduction on investment
- Interest reinvested automatically — no temptation to spend it
- Interest earned in years 1–4 counts as deemed investment under 80C (double tax benefit)
- Can be pledged as collateral for loans from banks and NBFCs
- No TDS — but interest is taxable; declare in ITR each year
- Transferable to another person once during the holding period
Watch Out For
- No premature withdrawal before 5 years (except on death of holder or court order)
- Interest is taxable every year even though you receive it only at maturity — plan your ITR accordingly
Compare All NSS Schemes
See how NSC compares to all other National Savings Schemes in one table.
← View All NSS Interest Rates
