In today’s busy world, everyone wants to grow their money safely at home. If you want your money to be safe and get guaranteed returns, the National Savings Certificate (NSC) scheme from the post office is useful. This scheme is fully backed by the government. Your money will stay safe even if the market changes. It is a good choice for anyone who wants a safe investment.
Key Features of National Savings Certificate (NSC)
1. Government Backing & Safety
This scheme is fully backed by the Government of India. This means your principal and earned interest are guaranteed by the government. It makes the scheme very safe and almost risk-free.
2. Guaranteed and Fixed Returns
The interest rate is fixed when you invest. Even if the government lowers the NSC interest rate later, your investment will continue to earn interest at the original rate.
3. Tenure
The current NSC (Issue VIII) has a lock-in period of 5 years.
4. Interest Rate
The Ministry of Finance fixes the interest rate every quarter. For the current quarter (October–December 2025), the rate is 7.7% per year. Interest is calculated annually with compounding, but it is paid only at maturity.
5. Tax Benefits (Section 80C)
You can get a tax deduction of up to ₹1,50,000 per year under Section 80C for the amount invested in NSC. Interest earned in the first four years is also considered reinvestment and eligible for tax deduction.
6. Open Account Online
You can open an NSC account online from home. There is no need to visit the post office. You can also use the nearest post office to invest if you prefer.
7. Investment, Interest, and Returns
The investment period is 5 years with an annual compounding interest of 7.7%.
Example: If you invest ₹4,00,000, after 5 years you will get ₹1,79,613 as interest. Your total fund will be ₹5,79,613.
8. Tax Deduction on NSC
Investing in NSC reduces your tax liability under Section 80C.
9. Loan Benefits
You can take a loan against your NSC investment. You may get 85–90% of the certificate’s value as a loan. The loan depends on the tenure and rules, and banks or financial institutions usually provide it. You can also reinvest the interest earned.