The NSC scheme, short for National Savings Certificate, issues 5 year savings bonds sold only at post offices, now paying 7.7% a year compounded and paid at maturity. ₹1 lakh invested today becomes ₹1,44,903 after five years.
The NSC scheme is popular because the deposit, and the interest it earns in the first four years, can cut your taxable income under the old regime. This hub covers how NSC works and links to every detailed NSC page. We are an independent site, not India Post.
At a glance
Rate
7.7% a year, compounded yearlyTerm
5 yearsMinimum
₹1,000, then multiples of ₹100Maximum
No limitTax
Deduction on deposit; interest taxableWhere
Post offices only
NSC scheme in one minute
The national savings certificate (NSC) is a fixed, five year, government backed certificate. You pay once, it grows at a fixed rate, and you get one payment at the end. People search for the NSC scheme in post office, the national saving scheme post office or simply post office NSC, and they all mean this product.
It sits in the same family as KVP, but with a shorter term and a tax deduction. Unlike a bank FD, it cannot be broken early, which keeps the money safe from impulse spending but makes it unsuitable for emergency funds. For the full form of NSC and its history, there is a separate short page.
How NSC in post office works
You buy a certificate (today it is issued electronically, with a passbook or e receipt) for any amount from ₹1,000. Interest is added to it every year and paid to you, with the original amount, after five years. Nothing is paid out in between.
| End of year | Value of ₹1 lakh at 7.7% |
|---|---|
| 1 | ₹1,07,700 |
| 2 | ₹1,15,993 |
| 3 | ₹1,24,924 |
| 4 | ₹1,34,544 |
| 5 (paid out) | ₹1,44,903 |
The NSC calculator shows this table for any amount.
NSC scheme details: who can buy and how
- Any resident Indian adult, alone or jointly with up to two others.
- A guardian for a minor, or a child aged 10 or more in their own name.
- NRIs cannot buy new certificates, and HUFs and trusts are not allowed.
You need Aadhaar, PAN, photos and the purchase amount. Account holders with India Post internet banking can buy NSC online; the steps are in how to buy NSC online. Banks do not sell NSC; it is a post office product.
Tax benefit of the national savings certificate
Under the old regime, the amount you invest counts toward the ₹1.5 lakh deduction under 80C, now section 123 of the new Income-tax Act. The interest added in years one to four is treated as reinvested, so it also qualifies for the deduction each year. The interest is taxable, but because the deemed reinvestment offsets it, most of it is not taxed in those years.
No TDS is cut on NSC. The full picture, including how to show NSC interest in your return, is on is NSC interest taxable.
Locked for 5 years: the rules on early closure
NSC can only be cashed before maturity in three cases: the death of a holder, a court order, or forfeiture by a bank that holds it as a pledge. You cannot close it early just because you need money.
What you can do is pledge it to a bank as security for a loan. Read NSC rules for transfers, nominees and what happens at maturity.
What happens at maturity of the NSC post office certificate
On the maturity date, the full value is credited to your linked savings account, or paid by cheque. You need the passbook or e receipt and a withdrawal form. If you do nothing, the money waits and does not earn more NSC interest after maturity.
Many people roll it straight into a new certificate to restart the five year cycle and claim a fresh deduction. Others move it to SCSS after 60 for a quarterly income. If the holder has died, the nominee can claim it with the death certificate; without a nominee, legal heirs follow a longer process, so always add one.
Pledging NSC and other everyday questions
- Loan against NSC: banks accept NSC as security. The post office marks it as pledged, and you cannot cash it until the loan is closed.
- Transfer: an NSC can move to another post office if you shift city, and in limited cases to another person, such as a legal heir.
- Lost receipt: certificates are now held electronically, so a lost printout is not a loss of money. Ask the counter for a fresh statement.
- Several certificates: many people buy a new NSC every year, so one matures every year after the fifth. This gives a yearly payout without breaking any certificate.
NSC full form and the names people use
NSC stands for National Savings Certificate. People also call it the national saving scheme, national saving certificate scheme or NSC VIII issue, the current series. The plain word "nsc" also brings up an unrelated listed company and some sports bodies; this page is only about the savings certificate. More on the name in NSC full form.
Who NSC suits, and who should look elsewhere
| Suits | Look elsewhere if |
|---|---|
| Old regime taxpayers filling the ₹1.5 lakh limit | You use the new regime and need no deduction |
| People who want a fixed 5 year return with no market risk | You may need the money before five years |
| Parents saving in a child's name | You want regular income; try MIS |
NSC compared with other post office options
| ₹1 lakh for 5 years | Rate | Value | Deduction |
|---|---|---|---|
| NSC | 7.7% | ₹1,44,903 | Yes |
| 5 year FD | 7.5% | ₹1,38,568 (interest paid yearly) | Yes |
| KVP | 7.5% | About ₹1,43,563 | No |
NSC wins on a five year horizon for most people. For a closer look at the two certificates, see NSC vs KVP, and for the latest rate, NSC interest rate.
Frequently asked questions
What is the NSC post office interest rate now?
7.7% a year for certificates bought this quarter, compounded yearly and fixed for five years.
How much will ₹1 lakh NSC give after 5 years?
₹1,44,903 at 7.7%. That is ₹44,903 of interest.
Is there a maximum limit on NSC?
No. You can invest any amount, though only ₹1.5 lakh a year counts for the old regime deduction.
Can I buy NSC from a bank?
No. NSC is sold only through post offices, at the counter or through India Post internet banking.
Does NSC pay interest every year?
No. Interest is added each year and paid with the principal at maturity.
Is NSC a safe investment?
Yes. The Government of India issues it, and it carries no market risk.
Can a child hold an NSC in post office records?
Yes. A parent or guardian can buy NSC for a minor, and a child aged 10 or more can hold one in their own name. The certificate passes to the child's control at 18, and the guardian signs until then.
What if I forget to collect my NSC at maturity?
The money stays safe but stops growing at the NSC rate. Visit the counter with your passbook or receipt and a withdrawal form; there is no penalty for collecting late.