NSC – National Saving Certificates

National Saving Certificate is an investment option by which an individual can invest his income to get a fixed interest. You can reinvest the interest earned and get the benefit of 80C deduction under income tax. We will talk about here the complete detail of National Savings Certificate (NSC) VIII Issue like who can apply, where to apply for NSC, how to apply for NSC, nomination, denomination, interest rate etc. You can ask your queries about National Savings Certificate (NSC) via the comment form.

Scheme Name	National Saving Certificates (NSC) VIII Issue
Who Can Apply	Any Individual
Where to Apply	Post Office, Public Sector Banks, ICICI Bank, Axis Bank, HDFC Bank
How to Apply	Payment to Post Office/Bank
Aadhaar Number	Required to Submit
Nomination	Available
Min Deposit	Rs.1000 w.e.f. 12-12-2019
Interest Rate	from 1-4-2020 (6.8% compounded annually) but payable at maturity
Maturity Period	5 Years
Income Tax Benefits	1,50,000 u/s 80c

Updated on 12-12-2019: 

In case of no nomination:

(i) If the eligible amount in the account does not exceed Rs.5 Lakh then the claimant must attach a death certificate, passbook, affidavit, letter of disclaimer, the bond of indemnity.

(ii) If the eligible amount in the account exceeds Rs.5 Lakh then the claimant should submit the succession certificate issued by the court along with the claim form, passbook, and death certificate.

What is National Saving Certificate (NSC)

A National Savings Certificate (NSC) is one of the most popular fixed-income investments that you can open through your local post office. This initiative is launched by the Government of India. National Saving Certificate is a type of investment that encourages subscribers – mainly people with small to moderate incomes – to invest while saving on their income taxes at the same time.

In order to purchase it, you will need to submit the KYC documents that are required at your local post office. Even though NSCs can be purchased without maximum limits, investors can only qualify for Section 80C tax savings if they invest up to Rs 1.5 lakh annually.

Who can Apply for NSC?

• Any adult individual can purchase NSC VIII Issue, in his own name (single holder type) or jointly with another adult individual with the condition ‘jointly or survivor’ (A-type) or ‘either or
  survivor’ (B type).
• Besides, parents and guardians on behalf of a minor can also purchase these (single-holder type) certificates. Issue of these certificates to banks, companies, corporations and other institutions
  has been discontinued w.e.f. 1.4.1995.
• W.e.f. 13.5.2005, a HUF cannot purchase NSCs.’Prior to 2.8.2001, the Karta of a HUF was allowed to purchase NSCs in his name jointly with any adult co-parcener, without adding the word ‘HUF’. In such cases, the tax benefit would be allowed to the HUF. In the opinion of the Board of Editors, this position should prevail w.e.f. 13.5.2005 also.
• Non-resident Indians cannot invest in NSCs (VIII Issue). ¹ W.e.f. 3.10.2017, if a resident holder subsequently becomes non-resident, the certificate shall be deemed to be encashed on that date and it shall earn interest at P.O. Savings A/c rate till it is actually encashed.  ²

Where to apply for NSC?

• Any post office who are registered or approved by Government agencies are authoritative to release NSC certificates, so anyone can purchase a redeemed NSC at any time when he is willing to have an NSC certificate.
• All public sector banks and ICICI Bank, Axis Bank and HDFC Bank are authorised on this behalf. ³

How to apply NSC?

• The application in the prescribed form along with the payment has to be deposited with the Post-Office/Bank directly through its authorised agent.
• The payment is to be made in cash or by cheque/pay order/demand draft or by presenting a withdrawal for, along with the passbook of a Post-Office Savings Bank Account or by Surrender of a matured old certificate (including National Development Bonds, Kisan Vikas Patra, etc.).
• Payment can also be made by electronic mode if certificates are purchased from post offices working on the CBS platform.
• An applicant should. furnish his Aadhaar Number or proof of enrolment for Aadhaar, at the time of application.
• Existing NSC holders are also required to furnish their Aadhaar numbers latest by 31.3.2019.

NSC Subscription

W.e.f 1-7-2016, NSCs VIII issue may be issued for any amount above Rs.100 and in multiples of Rs.100. One transaction of an investor on a day shall result in one certificate in e-mode or one entry in the passbook. Earlier, NSCs were issued in the denomination of Rs.100, Rs.500, Rs.1000, Rs.5000 and Rs.10,000.

NSC Interest Rate

Currently, the rate of interest is 6.8% per annum. The amount of interest accruing on a certificate of Rs. 100 shall be as follows:

Financial Year	Interest Rate
Currently the rate of interest is 6.8% w.e.f. 1-4-2020 4	6.8%
On NSC cetificates issued during 1-7-2019 to 31-03-2020	7.9%
On NSC certificates issued during 1-10-2018 to 30-06-2019	8%
On NSC certificates issued during 1-7-2017 to 31-12-2017 5	7.6%
On NSC certificates issued during 1-7-2017 to 31-12-2017	7.8%
On NSC certificates issued during 1-4-2017 to 30-6-2017	7.9%
On NSC certificates issued during 1-10-2016 to 31-3-2017	8.0%
On NSC certificates issued during 1-4-2016 to 30-09-2016	8.1%
On NSC certificates issued during F.Ys. 2013-14 to 2015-16	8.5%
On NSC certificates issued during F.Y.2012-13	8.6%
On NSC certificates during 1.12.2011 to 31.3.2012	8.4%
On NSC certificates issued upto 30.11.2011	8%

On certificates issued w.e.f 1.4.2016, interest shall be compounded yearly. On certificates issued up to 31.3.2016 interest shall be compounded half-yearly.

Check NSC interest Table Chart 

Nomination NSC

In case of no nomination w.e.f. 12-12-2019

(i) If the eligible amount in the account does not exceed Rs.5 then the claimant must attach a death certificate, passbook, affidavit, letter of disclaimer, the bond of indemnity. 

(ii) If the eligible amount in the account exceeds Rs.5 Lakh then the claimant should submit the succession certificate issued by the court along with the claim form, passbook, and death certificate. 

• The facility of nomination is available on all certificates (including the joint-holders type), except for the certificates purchased by or on behalf of a minor.
• In case of no nomination, payment up to Rs. 1,00,000 can be made to the legal heirs of the deceased holder even in the absence of Probate or Letter of Administration or Succession Certificate.

Note: It may be noted that the Supreme Court has held that if a person holding an NSC or an insurance policy dies, his legal heirs would have the sole right over the money on maturity rather than the nominee mentioned in. the certificate.  The nomination only indicated the person who was authorised to receive the money. Amount paid to the nominee becomes the estate of the deceased and devolves upon all persons who are entitled to succession under law, customs or will of the deceased.

NSC e-Mode Certificate

• W.e.f. 1-7-2016, physical pre-printed certificates shall be discontinued and NSCs shall be issued either on exclusive electronic mode or passbook mode.
• The issue of NSC shall be conveyed to the investor electronically (by email/on mobile).
• NSC in e-mode can be accessed online only by the investor through electronically secure means.
• Under passbook mode, NSC shall be issued in prescribed format printed on passbook under the signature of the authorised official.

NSC Maturity

The maturity period for NSC was 6 years but due to revision recently the period is now 5 years for the NSC VIII issue. For general understanding, if the value of the certificate is Rs. 100 then on its maturity the compounded amount which one gets is Rs. 160.10. The maturity amount can even be re-invested. The maturity value of any other value is charged under a proportionate rate.

The amount payable on maturity for a certificate of Rs.100 denomination (proportionately for other certificates) shall be –

For certificated issued up to	Amount
1-4-2013 to 31-03-2016	151.62
1-4-2016 to 30-09-2016	147.61
1-10-2016 to 31-3-2017	146.93
1-4-2017 to 30-06-2017	146.25
1-7-2017 to 31-12-2017	145.58
1-1-2018 to 30-09-2018	144.23
1-10-2018 to 30-06-2019	146.93
1-7-2019 to 11-12-2019	146.25
12-12-2019 to 31-03-2020 (F.V. Rs. 1000)	1462.54
1-4-2020 (F.V. Rs. 1000)	1389.49

Loan on NSC

The amount of the loan depends on the bank from which you are going to apply. Once you have an NSC certificate you can come within reach of any nearest scheduled bank or any cooperative bank for a loan. It is better to approach any known bank with which you have a close relationship because each and every bank has its own banking rules. Obtaining a loan or overdraft through this certificate is simple and flexible and it is neither expensive nor a complicated process compared to any other unsecured loan like credit loans or credit cards used to have.

NSCs Income Tax Benefits

Amount invested in NSC-VIII issue along with PPF/LIC/ULIP etc. up to a maximum of Rs. 1,50,000 is eligible for deduction u/s 80C. Interest accrued during the year (except for the last year) shall be deemed to be reinvested and shall also qualify for deduction u/s 80C.

So being a government-oriented instrument you have the security that the money will not die and would be used for a good purposes with the fact that you get a good return. So choose your NSC certificate with ingenuity and practicality.

Official Website

1. GSR 1238(E), dt. 03-10-2017
2. GSR 1238(E), dt. 03-10-2017
3. Notification NO.7/10/2014-NS dt. 10-10-2017
4. Notification No. GSR 284 (E) dt. 5-5-2020
5. Vide Notification F.No.1/4/2016-NS Dt. Jan 2018