What is a National Savings Certificate (NSC) And How To Invest In It?


You must have heard about the National Savings Certificate and maybe planning to invest in it. Before that, you need to know about the details of this low-risk fixed income investment scheme which you can open in your nearest post office.

National Savings Certificate
National Savings Certificate

What Is National Savings Certificate?

The National Savings Certificate has a fixed maturity period of five years. You need to invest a minimum amount of Rs 100, on which interest will be payable as per the rates decided by the Ministry of Finance. Currently, it offers a 6.8% rate per annum. Guess what, TDS won’t be deducted, but you will get the total value at maturity though the interest is compounded annually.


This is a tax-saving investment. The principal amount under NSC allows tax deduction up to Rs 1.5 lakh under Section 80C of Income Tax Act,1961. Interest earned on the first four years is tax-free as they are reinvested, but the fifth year interest is prone to tax.

Before investing in NSC, you need to be eligible. A person can invest in NSC if they are an Indian. But, anyone belonging to Hindu Undivided families(HUF) cannot invest in this.

Also Read: Top 8 Successful Indian Cricketers who invested in startups

How To Invest In National Savings Certificate

  • Fill the application form. You can collect it from the nearest post office, or you can also get it online.
  • After that, you need to submit KYC documents with your signature. It is better to carry original documents and address proof in verification.
  • Invest the money through cash/cheque.
  • Collect the certificate and keep it for future use.

You can also transfer your NSC from one post office to another. For that, you need to fill the Application for Transfer of Savings Certificates from your former post office. Since this is a government-backed scheme, the interest rates across all post offices are equal.

Also, the holder name of NSC can be changed. You need to fill the ‘Application for transfer of Savings Certificate from Person to Person Under Specified Conditions’ from your post office.

When you want to retrieve the maturity amount after five years, you need to submit the original NSC along with a valid identity proof and NSC encashment form.


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