National Saving Certificate(NSC) Calculator – NSC Post Office Savings Scheme

Published Date - 19 March 2018 01:07:22 Updated Date - 19 March 2018 01:08:52

National Saving Certificate (NSC) is one of the most popular post office tax saving scheme. It gives you a fixed amount after 5 years. This scheme gives you tax benefit under section 80C of the income tax act.

Subsequently, all the investment upto Rs. 1.5 lakh are applicable for tax deduction under section 80C of IT Act. National Saving Certificate Interest Rate 2018 is fixed at 7.6% (from 1 jan 2018) compounded p.a and to check it using National Saving Certificate Calculator. Moreover, people can firstly check nsc interest rate chart and fill nsc online application form to apply for this central government scheme.

One such combination of attractive interest rate, safe investment avenue and tax benefits are the National Savings Certificates or NSC. These are investment tools that can help investors get returns on the money invested and also get benefits in their taxable incomes. The inception of the NSC can be traced back to the 1950s when the government issued savings certificates in order to raise money to help fund the development of a new and independent India. They are issued by the post office and can be taken from any branch of the Indian postal service.

NSC Interest Rate Chart shows that the nsc interest rate is at par with other schemes like Public Provident Fund (PPF), Kisan Vikas Patra (KVP)Sukanya Samriddhi Yojana (girls) – check nsc vs ppf vs kvp vs ssy.

NSC account maturity period is only 5 years. National savings scheme rate of interest is low and is taxable only at the time of maturity. People can use national saving certificate as collaterals and can take loans from banks. NRI, HUF and Trusts are not eligible to invest and purchase National Saving Certificate (NSC).


Who should invest in NSC?

Anyone who is looking for a safe investment avenue to save taxes can opt for the NSC. The NSC offers guaranteed interest and complete capital protection. Since it is backed by the government and can be bought from most post offices in India, the NSC is also more easily accessible than other tax-saving investments. However, the NSC cannot earn inflation-beating returns as compared to other tax-saving investments like tax-saving mutual funds and National Pension System.

Who can’t buy NSCs?

While NSC is an investment that almost every tax paying Indian can put money in, there are some who are not allowed to invest in these schemes.

  • Since the scheme is aimed at residents of the country, those not residing in India are not eligible to invest in NSC.
  • Under Issue VIII of NSC Trusts and Hindu Unified Families are also not eligible to invest in NSCs.


How NSC Works

When it comes to investing in NSC here is what you need to know about how the whole scheme works. How the whole thing works is, you buy an NSC worth a specific amount which is considered your investment. The purchase of the certificates will be done to the tune chosen by you but in denominations designated by the government. This means that if you choose to invest

Once the investment has been made, it earns an interest rate based on the rates associated with the type of certificate bought. The maturity date for these certificates is set to 5 or 10 years from the date of purchase but the interest is calculated on a yearly basis. This interest will not be paid to the certificate holder till such time as the investment matures. The interest that is earned is also be reinvested in the NSC itself.

National Savings Scheme NSS – Type of Certificate

There are 3 types of National Saving Certificate which are as follows:-

  • Single Holder Type Certificate – Any individual can purchase National Saving Certificate for himself or on the behalf of a minor.
  • Joint A Type Certificate – This type of NSC is issued to 2 adults jointly which is payable to both the nsc account holders.
  • Joint B Type Certificate – This nss certificate type is issued jointly to 2 adults which is payable to either of the nsc account holders.

People can redeem National Saving Certificates (NSC) only after the nsc maturity period on submission of certificate at post office. Moreover on receipt of maturity amount, account holder has to sign on the back of nss certificate and surrender the certificate to Post Master.


What are the different types of NSC issues?

The NSC had two types of certificates–NSC VIII Issue and NSC IX Issue. The NSC IX Issue was discontinued in December 2015. Currently, only the NSC VIII Issue is open for subscription. There is no maximum limit on the purchase of these certificates. You can get them from most post offices in India. The current interest rate on the NSC VIII Issue, as of 1 April 2016, is 8.1% per annum. NSC certificates can also be transferred from one person to other as well as from one post office to another. A duplicate certificate can also be requested in case the original is misplaced or gets destroyed.


National Saving Certificate Interest Rate

NSC Interest Rate is 7.6% compounded annually. National Savings Certificate interest amount is taxable. NSC Account Holder does not receive interest earned but it gets re-invested and compounded annually. Moreover as per the National Saving Certificate Calculator, the amount of Rs. 100 will become Rs. 144.23. As NSC is a specific instrument under section 80C of IT Act, so taxpayer can claim this interest amount for tax deduction.

For this reason, taxpayers will first have to show this interest amount as income and then apply for tax deduction. However, subscribers can claim maximum tax deduction upto Rs. 1.5 lakh.

Document required for Purchasing NSC

The documents required when purchasing a fresh set of National Savings Certificates will be:

  • The application form for the investment. This is called Form 1 and allows you to declare the investment amount and the nominees.
  • Other supporting document may also be asked for and these could include:
  • Proof of identity
  • Proof of address

How to buy NSC

Buying an NSC certificate is an incredibly simple process however it is NOT one which can be followed online. A National Savings Certificate can be bought from any post office and will require the submission of certain documents. Here is how you can get yourself some NSC certificates:

Step 1: Fill up the NSC application form that will collect some basic information about you and how much you want to invest.

Step 2: Submit any supporting document that might be needed.

Step 3: Nominate a beneficiary for the investment.

Step 4: Make the payment for the amount you want to invest. This payment can be made in cash or via cheques or even via a demand draft.

Step 5: Collect the certificates from the post office. It must be noted that if the payment has been made via a cheque then the certificate will only be issue upon realisation of the payment made. In other cases the certificates will be issue immediately.

Step 6: Check the certificates for clerical or mathematical errors. If there are any mistakes you can get them corrected.


National Saving Certificate Calculator

Moreover, subscribers can calculate their interest amount in National Savings Scheme NSS using the link given below:-
NSC Interest Calculator

National Savings Scheme NSS – Tax Benefits

Subscribers should invest in National Savings Certificate Scheme due to the following reasons:-

  • People can save income tax on income upto Rs. 1.5 lakh.
  • NSC provides guaranteed Interest Rate of 7.6% per annum and can be checked using National Saving Certificate Calculator.
  • National Saving Certificate Maturity Period is only 5 years.
  • This savings scheme is easily available at all Post Offices.
  • Furthermore, Interest is compounded annually and is reinvested by default.

Along with the rebate of income tax, interest earned is also added to the original investment and is also eligible for tax break. For eg. if anyone purchases NSC Certificate worth Rs. 1000, then individual will get tax break on initial investment in 1st year. Moreover, people will also get tax rebate on additional NSC purchases and on interest earned.

Who Can Invest – Maximum and Minimum Investment

Any Individual who is looking for safe investment option, guaranteed interest and capital protection can invest in NSC. This investment option is easily available accessible than other tax saving methods. However, NSC is unable to beat inflation beating results as other investments like Tax Saving Mutual Funds and National Pension System.

Any person who wants to open National Saving Certificate Account can do it through minimum investment of only Rs. 100. Moreover, there is no maximum limit and can purchase any number of denominations of Rs. 100, Rs. 500, Rs. 1000, Rs. 5000 and Rs. 10,000. Afterwards, candidates will receive interest amount which can be checked using National Saving Certificate Calculator.

National Saving Certificate Payment – NSC Purchase

Buyer must submit Form A to purchase NSC account. For this, buyers can submit payment through Cash, Cheque, Pay Order, Demand Draft drawn in favor of Postmaster. Moreover, candidates can make payment from withdrawal funds of Post Office Savings Bank Account.

Accordingly, Postmaster will issue a new NSC Certificate on the spot or provide a provisional slip for purchase of certificate. These national savings scheme nss certificate can also get transferred from 1 post office to another.

NSC Forms

There are three forms that are central to the issuance and maintenance of an investment in National Savings Certificates. These forms are:

  • Form 1: Application form

This is the application form that is the first thing that is needed when it comes to purchasing NSC. There are two pages in this form and the first page is the one that you need to be concerned with. It is on this page that information pertaining to your intended purchase will be collected. It will take down details of the amount that you wish to invest along with the details of the person in whose name the certificates need to be purchased, including minors. The form will also collect information about nominations and at the bottom will be a place where you and a witness, in case of a nominee, will sign the form. It also has the acknowledgement for the receipt of certificates at the bottom of page 1. Page 2 of this form is meant for official use and you won’t have to worry about it.

  • Form 2: Nomination form

This is the form that can be used to nominate a beneficiary in case one was not appointed when the certificates were purchased. This form allows you to declare the name, the date of birth and address of the person being nominated. In case the nominee is a minor, you can even inform the post office about the adult who will be responsible for the minor. Once these details are entered, you will have to enter the details of the certificates to which this nomination pertains. The last bit of this form is the part where you can sign the form and if the person making the change is illiterate, then the witnesses who sign the form will have to be someone who is known to the post office.

  • Form 3: Change of nomination form

The third form, also known as Form 3, is the one that can be used in case you wish to cancel the existing nomination. The form will collect information about the new nominees and after that, the information pertaining to the certificates for which the nomination is being changed. This form too will require the signature of a witness and will have to be submitted only at the post office at which the NSC was purchased.

Nominating a Beneficiary for NSC

Even though it is not mandatory, it is best to nominate someone to receive the benefits of your investment in the event of your death. If the certificates are held under the joint holding scheme and one of the holders passes away, the investment can still be operated by the other holder but in case all the holders pass away, the nominee will get the value of the NSC. Here are some other things that need to be kept in mind about nominations for NSC.

  • Nominations can be made when the certificates are being purchased using Form 1.
  • They can also be made after the certificates are purchased using Form 2.
  • If the nomination needs to be changed you will need to use Form 3.
  • If the holder is illiterate they will attest the forms with a thumb impression and the witness will have to be people known to the post office.
  • A minor can be nominated as a beneficiary but in such cases an adult will also have to be mention as it will be this person to whom the benefits will be paid on behalf of the minor.
  • Nominations and changes to nominations can only be made through the post office where the certificates were originally purchased.
  • In case a holder passes away without having made any nomination, the amount held in the NSC will be paid to the legal heirs of the holder.
  • If the denomination of the certificates is less than Rs. 500 then only one person can be nominated for each certificate.
  • If a certificate has been bought on behalf of a minor then nominations are not permitted.
  • If the nomination is being changed on certificates that were purchased on different dates, the nomination forms will have to be separate for each certificate.
  • The change in nomination will take affect the day it is registered at the post office and not before.


NSC vs PPF vs KVP vs ELSS vs NPS vs FD

Here we are comparing NSC with other tax saving instruments like Equity Linked Savings Schemes (ELSS), National Pension System (NPS), Public Provident Fund (PPF) and Tax-saving Fixed Deposits (FD). This comparison is on the basis of National Saving Certificate Interest Rate, Lock In Period and Risk profile:-
NSC Comparison with other Schemes


Rate of Interest

Lock in Period


National Saving Certificate (NSC)

7.6% compounded p.a (Guaranteed)

5 years

Risk Free

ELSS Funds

12% to 15% (expected)

3 years

Market Related Risks

Public Provident Fund (PPF)

7.6% compounded p.a (Guaranteed)

15 years

Risk Free

National Pension System (NPS)

8% to 10%

Till Retirement

Market Related Risks

Kisan Vikas Patra (KVP)

7.3% compounded p.a

9 Years 10 Months

Risk Free

Fixed Deposit

7% to 9% (Guaranteed)

5 years

Risk Free

National Savings Certificate Issue & Maturity Period

NSC has 2 types of issues – NSC VIII Issue and NSC IX Issue. Central govt. has discontinued NSC IX Issue in December 2015. Accordingly, only NSC VIII is open for subscription and comes with a lock in period of 5 years. There is no TDS on the interest earned so subscriber has to pay applicable tax on the total maturity value.

Loan on NSC Issue – People can also take loans from the banks against their investment in National Savings Scheme NSS. For this reason, subscriber has to transfer their certificate in the name of bank from which he / she is seeking loan. However, people cannot cannot make nsc withdrawal prematurely.

NSC Nomination Facility & Issuance of Duplicate Certificate

People can make nomination and select their nominee at the time of purchase through filling Form 1 or before NSC maturity in Form 2. This nominee can claim the maturity amount if the original account holder dies. This nominee can encash NSC at any time before or after NSC Maturity and can perform following operations:-

  1. Encash the National Savings Scheme NSS Certificate.
  2. Sub-division of NSC Certificate in suitable denominations in favor of individual nominees.

For this, nominee must intimate the Postmaster about the death of original account holder by submitting Death Certificate.

National Savings Certificate – Premature Encashment / Withdrawal

Premature withdrawal is not applicable in case of NSC. However, NSC can be encashed prematurely under following conditions:-

  • If NSC Account holder or joint account holders dies.
  • A pledge of Gazetted Government Officer to forfeit account in accordance with the rules.
  • On the orders of court of law.

If National Savings Scheme NSS account is encashed within 1 year, then no interest is provided. In case the withdrawal is after 1 year then candidates will get interest but with discount.

National Saving Certificate – Highlights at a Glance

The important features and highlights of National Saving Certificate are as follows:-


Interest Rate

Minimum and Maximum Balance

Important Features

National Savings Certificate – NSC VIII Issue

  • 7.6% compounded p.a (effective from 1 January 2018) but payable at maturity as per National Saving Certificate Calculator.
  • Moreover, Rs. 100 becomes 144.23 after 5 years.

Minimum Rs. 100 and No Maximum limit

  • Any adult can purchase NSC for himself or on the behalf of a minor or any minor
  • Subsequently, deposits qualify for tax rebate under 80Cof IT Act.
  • NSC Interest Amount after 1 year gets re-invested and is liable for tax deduction at maturity as per IT Slab.


— Furthermore for any query, candidates can visit the official website


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