- 7.7%Interest a yearCompounded yearly
- 5 yearsTerm
- ₹1,000MinimumNo upper limit
- ₹1.5 LTax deduction a yearOld regime, Section 123 (earlier 80C)
What is the National Savings Certificate?
The National Savings Certificate is a savings scheme of the Government of India, sold at post offices. The one on sale today is the VIII issue, under the National Savings Certificates (VIII Issue) Scheme, 2019. It is now given in electronic form or as a passbook, not as a paper certificate.
You invest once. The interest is added to your money every year, and the next year's interest is worked out on the bigger amount. You get everything back after 5 years. Nothing is paid to you in between.
- Step 1Invest onceFrom ₹1,000, with no upper limit, at a post office.
- Step 2Interest grows every year7.7% a year, added to your money each year.
- Step 3Get it all after 5 yearsYour money and all the interest, in one payment.
Example: Priya, 34. She buys NSC for ₹1,00,000 at 7.7%. She gets nothing during the 5 years. At the end, she gets ₹1,44,903 in one payment.
- Invested
- ₹1,00,000
- Interest
- ₹44,903
- After 5 years
- ₹1,44,903
NSC interest rate 2026: 7.7%
The rate is 7.7% a year for October to December 2026. The Ministry of Finance reviews it every 3 months, but the rate on the day you buy NSC stays the same for all 5 years.
- Interest is compounded once a year: each year's interest is added to your money.
- All the interest is paid at maturity, together with the money you invested.
| Period | NSC rate |
|---|---|
| From April 2023 | 7.7% |
| From January 2023 | 7% |
| From April 2020 | 6.8% |
See every past rate on the NSC interest rate page.
NSC maturity value: how much will you get?
Maturity value = amount × (1 + 7.7%)5, at 7.7%.
| Invested | Interest | After 5 years |
|---|---|---|
| ₹1,000 | ₹449 | ₹1,449 |
| ₹10,000 | ₹4,490 | ₹14,490 |
| ₹50,000 | ₹22,452 | ₹72,452 |
| ₹1,00,000 | ₹44,903 | ₹1,44,903 |
| ₹1,50,000 | ₹67,355 | ₹2,17,355 |
| ₹5,00,000 | ₹2,24,517 | ₹7,24,517 |
For your exact amount, use the NSC calculator.
NSC eligibility: who can buy it?
- Yes: Any resident Indian adult, in their own name
- Yes: Up to 3 adults together, as a joint certificate
- Yes: A parent or guardian, for a minor or a person of unsound mind
- Yes: A minor aged 10 or more, in their own name
- No: NRIs (Non-Resident Indians)
- No: HUFs (Hindu Undivided Families)
- No: Trusts, companies and other organisations
You can buy as many NSCs as you like, at any time, at the same or different post offices.
How to buy NSC at the post office: documents and steps
- Step 1Visit a post officeAny post office in India.
- Step 2Fill in the formThe NSC account opening form, also on the India Post website.
- Step 3Give KYC documentsAadhaar, PAN and passport-size photos.
- Step 4Pay the amountFrom ₹1,000, in multiples of ₹100, by cash or cheque.
- Step 5Add a nomineeSo your family gets the money easily.
- Step 6Get your passbookOr an e-certificate, as proof of your NSC.
| Who | Documents |
|---|---|
| Everyone | Filled form, Aadhaar, PAN, passport-size photos |
| Joint certificate | KYC documents of every holder |
| NSC for a minor | The minor's birth certificate, and the KYC documents of the parent or guardian |
NSC tax benefit: deduction on the deposit and the yearly interest
In the old tax regime, NSC gives a deduction under Section 123 of the Income-tax Act, 2025 (earlier Section 80C), within the ₹1,50,000 yearly limit for all such investments. There are two parts:
- The amount you invest: you can claim it in the year you buy NSC.
- The interest of years 1 to 4: it is not paid to you. It is treated as reinvested in NSC, which is like a new investment. So you show it as income, and you can also claim the same amount as a deduction for that year.
- The interest of year 5: it is paid out at maturity, so it is taxed but cannot be claimed.
Priya's ₹1,00,000 NSC, year by year:
| Year | Value at start | Interest earned | Counts as new investment | Value at end |
|---|---|---|---|---|
| Year 1 | ₹1,00,000 | ₹7,700 | Yes, ₹7,700 | ₹1,07,700 |
| Year 2 | ₹1,07,700 | ₹8,293 | Yes, ₹8,293 | ₹1,15,993 |
| Year 3 | ₹1,15,993 | ₹8,931 | Yes, ₹8,931 | ₹1,24,924 |
| Year 4 | ₹1,24,924 | ₹9,619 | Yes, ₹9,619 | ₹1,34,544 |
| Year 5 | ₹1,34,544 | ₹10,360 | No, it is paid out | ₹1,44,903 |
Example: Priya's deduction. In the old regime, she claims ₹1,00,000 in the year she buys NSC. Then she claims the interest of years 1 to 4 as it is earned. The interest of year 5, ₹10,360, is only taxed.
- Deposit claimed
- ₹1,00,000
- Interest claimed, years 1 to 4
- ₹34,544
- Total claimed
- ₹1,34,544
The new tax regime does not give this deduction. The interest is taxable in both regimes.
NSC premature withdrawal rules
NSC is locked for 5 years. You cannot encash it early just because you need the money. It can be closed early only in these cases:
- Step 1Death of a holderIf the holder, or any joint holder, dies.
- Step 2Forfeiture by a pledgeeIf it was pledged to a gazetted government officer and is taken under the rules.
- Step 3Court orderIf a court orders it to be paid.
Loan against NSC: pledging as security
You can pledge NSC as security for a loan. The post office then marks it as pledged to the lender. Lenders that accept NSC include:
- Scheduled banks and co-operative banks or societies
- Government companies, public corporations and local authorities
- Housing finance companies approved by the National Housing Bank
The lender decides how much it lends and at what interest. If the loan is not repaid, the lender can take the NSC money. Once the loan is repaid, the lender releases the pledge.
NSC maturity, nominee, death and transfer
- Step 1At maturityAfter 5 years, you get the full value. NSC cannot be extended; you can buy a new one.
- Step 2NomineeAdd one or more nominees when you buy NSC, or later at the post office.
- Step 3If the holder diesThe nominee or heirs can take the money early, or keep it in their name until maturity.
- Step 4TransferMove it to another post office freely. Transfer to another person is allowed only in a few cases, such as to the nominee or heirs.
NSC tax at maturity and TDS
- TaxableInterestAt your slab rate
- NoneTDSShow the interest in your return
- Tax-freeMoney investedComes back without tax
- NSC interest is taxed at your slab rate, in both the old and the new tax regimes.
- You can show the interest as income every year, as it is earned. Then, at maturity, only the last year's ₹10,360 (on ₹1,00,000) is left to show.
- If you did not show it every year, all the interest is taxed in the year you get the money.
- No TDS is cut, so remember to show the interest in your income tax return.
NSC: strengths and limits
- Yes: Backed by the Government of India
- Yes: Fixed rate for 5 years, compounded yearly
- Yes: Tax deduction on the deposit and the yearly interest (old regime)
- Yes: No upper limit, and no TDS
- Yes: Can be pledged for a loan
- No: Interest is taxable
- No: No early encashment except in a few cases
- No: Nothing is paid until maturity
- No: No extension after 5 years
NSC vs tax-saver FD vs PPF
| NSC | Tax-saver FD | PPF | |
|---|---|---|---|
| Interest rate | 7.7% | Set by each bank | 7.1% |
| Lock-in | 5 years | 5 years | 15 years |
| Amount | From ₹1,000, no limit | Up to ₹1.5 L a year for the deduction | ₹500 to ₹1.5 L a year |
| Deduction (old regime) | Deposit and yearly interest | Deposit | Deposits |
| Tax on interest | Taxable | Taxable | Tax-free |
| TDS | None | Yes, above the limit | None |
| Loan | Can be pledged | Usually not allowed | Loan from year 3 |
| Where | Post office | Bank | Post office or bank |
Read about the Public Provident Fund, or compare numbers on the PPF calculator and the FD calculator.
Frequently asked questions
What is the National Savings Certificate?
NSC is a government savings certificate sold at post offices. You invest once, the money grows at 7.7% a year, compounded yearly, and you get the full amount after 5 years. The deposit can save tax in the old tax regime.
What is the NSC interest rate in 2026?
7.7% a year for October to December 2026. The rate on the day you buy the certificate stays the same for all 5 years, even if the government changes the rate later.
What is the NSC maturity value of ₹1 L?
₹1,44,903 after 5 years at 7.7%. That is ₹44,903 of interest. ₹1,000 grows to ₹1,449.
Who can buy NSC?
Any resident Indian adult, alone or jointly with up to 3 adults. A parent or guardian can buy it for a minor, and a minor aged 10 or more can buy it in their own name. NRIs, HUFs and trusts cannot buy NSC.
What is the minimum and maximum amount in NSC?
At least ₹1,000, in multiples of ₹100. There is no upper limit. Only ₹1,50,000 a year counts for the tax deduction.
Can I claim NSC interest under Section 123 (80C)?
Yes, in the old tax regime. The interest earned in each of the first 4 years is treated as a new investment, so you can claim it as a deduction for that year, within the ₹1,50,000 limit. The interest of the last year is paid out, so it cannot be claimed.
Is NSC interest taxable?
Yes, at your slab rate. You can show the interest as income every year as it is earned, which also lets you claim the deduction on it in the old regime. Only the money you invested comes back without tax.
Is TDS cut on NSC?
No. The post office does not cut TDS on NSC interest. You must still show the interest in your income tax return.
Can I withdraw NSC before 5 years?
Only in a few cases: if the holder (or any joint holder) dies, if a pledgee who is a gazetted government officer takes it under the rules, or if a court orders it. You cannot close it early just because you need the money.
Can I take a loan against NSC?
Yes. You can pledge NSC as security for a loan from a bank, a co-operative society, a government company or a housing finance company approved by the National Housing Bank. The lender decides the loan amount and interest.
Can NSC be extended after 5 years?
No. NSC VIII issue cannot be extended. After 5 years you take the full amount. To keep investing, buy a new NSC at the rate on that day.
What happens to NSC if the holder dies?
The nominee or legal heirs can take the money before maturity, or keep the certificate in their name until it matures. If it is a joint certificate, the surviving holder gets it.