National Savings Certificate (NSC) is a savings scheme introduced to increase the mobility of small investments. The prime focus is to bring the small and mid-income families into the investment plans. For this, they have made National Savings Certificate (NSC) an easily accessible saving option by providing it in all the post offices around the nation.
It is a low-risk investment option that provides a decent return over a fixed interest. Being a Government of India-backed investment plan, people feel safe to invest in the NSC savings scheme. By using the NSC savings scheme you can enjoy the tax benefits under section 80C of the Income-tax act.
Table of Contents
1) What is the National Savings Certificate savings scheme?
NSC savings scheme was introduced and maintained by the Finance Ministry of India. The tenure of the NSC scheme is about 5 years. The main motto of the NSC savings scheme is to provide low-risk savings schemes to mid and small-income investors. The interest remains fixed throughout the tenure of the NSC scheme.
This is similar to the Public Provident Fund (PPF) scheme by the Government of India and the fixed deposit in the Post offices. These two schemes have the same working plans. But varies in the point
- The interest rate provided and
- Maturity period.
All these schemes have a unique feature that makes them suitable for a risk-free investment.
2) Why did we choose the NSC savings scheme?
The NSC savings scheme offers a guaranteed interest rate and complete protection on the capital (principal) amount. Another major advantage to choose the NSC scheme is it is easily accessible. Thus for all the Indian individuals who are looking for small and medium range investments with small risk and high security can invest in the NSC savings scheme.

You can apply for the NSC scheme all over the post offices around the nation, all over the nationalized banks like State Bank of India (SBI) Punjab National Bank (PNB), etc… and even in some top private banks like HDFC Bank, Axis Bank, and ICICI bank. You can also request tax deductions for the investment earned through the NSC savings scheme.
3) How to apply for the NSC scheme?
As said earlier, you need to go to post offices, nationalized banks, and private banks. Then you need to do KYC verification in the post office or in the bank. If you already have a savings account you don’t need to do KYC verification. You can apply for the NSC scheme either through a physical form or through electronic mode.
Follow the below-mentioned steps to apply the NSC savings scheme without a savings account.
- Initially fill the National Savings Certificate savings scheme application form provided by the NSC provider.
- After filling the NSC application form attach the required KYC documents which include passport size photo, PAN card details, and Aadhar details.
- Then go to the bank or the post office for the completion of KYC verification.
- After the KYC verification, deposit the money you wish to invest in your NSC savings scheme.
- Then you are provided with the receipt for the amount invested in the National Savings Certificate savings scheme.
3.1) Documents required to apply for NSC savings scheme
- NSC application form
- Passport size photographs
- Original documents such as Passport, PAN card, Aadhar card, Driving license, Voter ID, Senior Citizen ID or any Government ID
- Telephonic Bill or Electricity bill for address proof
In the column of original documents, any two out of this are enough for the verification process. You don’t need to submit all the above-mentioned documents.
4) How to apply National Savings Certificate (NSC) online?
To apply for the NSC savings scheme online with the existing savings account follow the below-mentioned steps.
- You just need to fill the NSC application form.
- If you have a savings bank account in the post office or the bank with an internet banking facility enabled, then simply fill the online NSC application form.
- You can also make the NSC online purchase through two modes
- Electronic mode or e-mode
- Passbook mode
4.1) Passbook mode
If you don’t wish to go for an e-mode then you can opt for passbook mode. Here you will be provided with the printed form of the passbook which looks similar to the Savings account passbook. All Core Banking Solutions (CBS ) post offices allow you only to purchase NSC through passbook mode.
When you have lost your passbook you would need to pay a certain amount as a service fee to issue the duplicate NSC savings scheme passbook. If you wish you can also switch to e-mode at any point of time. For this, you need to hand over the passbook.
4.2) E-mode
As said earlier if you have existing savings account you can go for an e-mode to purchase an NSC certificate. You can look at your account holding just like your FD and RD. Other than CBS post offices all the post offices have e-mode facilities.
5) What are the eligibility criteria for the NSC savings scheme?
Unlike Public Provident Fund (PPF) NSC comes with the feature that you can open the NSC scheme together. Where PPF only allowed individuals to hold PPF account. If you are a minor you can even opt for an NSC savings scheme.
Thus all individuals, joint individuals, and the guardians on behalf of the minor are allowed to open an NSC savings scheme. There are three exceptional cases who can’t open the NSC scheme. They are
- Certain trusts
- Hindu Undivided Families (HUF)
- Private and Public limited companies
- Non-resident Indians (NRI)
Except those, all Indians are allowed to open an NSC savings scheme. However, Karta of HUF’s can able to make NSC investments under their own name only. Thus all age groups are eligible to open the NSC savings scheme.

6) What is the interest rate of the NSC savings scheme?
The National Savings Certificate has a fixed interest feature. NSC interest rate for the current financial year (FY 2021-2022) is 6.8%. NSC interest rate for the past financial year (FY2020-2021) is also 6.8%. For the FY2019-2020, the interest rate is 7.9%.
The interest was decided by the Finance Ministry of the Indian Government. Interest provided on National Savings Certificate has compounded annually. Only at the time of completion of tenure, you can able to withdraw this interest amount.
7) What are the modes of holding the NSC savings scheme?
While opening the national savings certificate scheme you are allowed to choose one of the below mentioned modes of holding the account.
7.1) Single Holder type certificate
Single holder NSC certificate can be brought for yourself or on the behalf of the minor. Here the maturity amount will be available only for the single holder of the certificate. After the completion of the maturity period, he/she can able to withdrawal the amount. No one has permission to access it. It is simply an individual NSC savings scheme.
7.2) Joint A type certificate
Here the account can be handled by two investors. In other words, it is the same as that of the joint account. After the completion of the maturity period, the amount in the NSC savings scheme will be split into two and distributed equally to the two investors.
7.3) Joint B type certificate
This is the same as that of the Joint A type certificate but varies in terms of paying the amount to the investors. In this case, after the completion of the maturity period, all the amount will be transferred to one of the investors only.
8) How to transfer a National savings certificate(NSC)?
Transferring of national savings certificate from one branch of the post office to another branch is possible. Also, you can transfer a national savings certificate from one person to another. But transferring from one person to another is available only once till the maturity period. You can transfer by following the steps provided below.
- First, visit the post office branch where you have opened the national savings certificate scheme.
- Then get the FORM NC-32. Fill up the form and handover it to the NSC provider. Your national savings certificate will be transferred within few working days.
- If you wish to transfer from one person to another then fill up Form NC-34.

9) What are the benefits of the National Savings Certificate(NSC)?
Being a risk-free safe investment option, the National savings certificate is flooded with a lot of benefits. The benefits of the NSC savings scheme are
9.1) Loan against National Savings Certificate (NSC)
You can get a loan against a national savings certificate. To get the loan against the NSC scheme you should be eligible for the below-mentioned conditions.
- Only resident Indians can apply for loans against National SavingsCertifcate. NRI isn’t eligible for this feature.
- The interest rate of the NSC scheme varies depend upon the individual loan and the bank which offers the loan.
- As the tenure of the NSC scheme is only 5 years, the loan tenure directly depends upon the NSC scheme.
These are some of the basic conditions for a loan against the NSC scheme. It can also vary from one lender to another. Not all banks provide this facility. Only some of the leading private and public sector banks offer this facility.
9.2) Feature of holding a duplicate certificate
In the case of the original national savings certificate, it has a possibility of getting stolen or damaged. To avoid this issue you can get a duplicate national savings certificate. For this, you need to fill up Form NC-29. Submit it to the NSC scheme provider.
This form includes
- Your NSC serial numbers, denominations, etc…
- Also, you need to provide the date on which the certificate is issued.
- You need to provide the reason, why you need a duplicate certificate?
9.3) Key features
Some of the key features of the National Savings certificate are
- As the interest for the NSC scheme is fixed, it will provide a guaranteed return to the investor.
- Investors can enjoy the tax-saving feature up to Rs 1.5 lakhs p.a.
- It has an investment flexibility feature. You can even deposit a minimum sum of Rs.100. This makes the NSC savings scheme one of the best options for the financially weaker sections. Even they can able to make investments and able to earn interest from this plan.
- NSC savings scheme is more easily accessible. You can buy it from any post office, public sector bank around the nation. Also, you can easily transfer it from one branch to another, as well as from one person to another.
- You can use a national savings certificate as collateral for buying loans in the banking sector and in Non-Banking Financial Sector.
- The interest earned through the national savings scheme is compounded annually and got reinvested by default. These interests are allowed to withdrawal only after the completion of the maturity period.
10) What are the disadvantages of the National Savings Certificate?
Some of the disadvantages of the national savings certificate (NSC) are
- It cannot be extended after the completion of the maturity period.
- The tax exemption is allowed only up to 1.5 lakh p.a.
- Premature withdrawal is allowed only in specific cases. In other cases, you are not allowed to do withdrawal within the completion of the maturity period.
- Like PPF, NSC is also not an inflation-beating investment.

Hereby concluding that NSC can be a better investment option for mid and low-income families to save money for future purposes. Like PPF and FD in the post office, NSC is also a tax-saving, government-backed, risk-free investment option. If you need a safe investment option you can surely go for National Savings Certificate (NSC).
11) FAQ
The minimum amount you need to deposit in NSC is Rs.100. This means your denominations should be in multiples of 100.
Both the options have the same features like fixed interest, tax exemption, deposit limit, and maturity period. PPF and NSC, both are risk-free investment options. However, interest earned through NSC in the fifth year is taxable. On the other hand PPF tenure is about 15 years. So both the options are beneficial in their way. It always depends upon your personal requirements.