Key features and deposit rules
- Tenure: Fixed lock-in maturity of five years (NSC VIII Issue).
- Minimum deposit: Prescribed low entry minimum with deposits in multiples of one hundred rupees, and no maximum ceiling.
- Account types: Single adult account, joint account (up to three adults), or account on behalf of a minor.
- Compounded interest: Interest is compounded annually and paid automatically upon maturity along with the principal.
Tax benefits under Section 80C
Deposits qualify for tax deduction under Section 80C of the Income Tax Act up to the statutory limit of one lakh fifty thousand rupees per financial year. The annual interest accrued is deemed reinvested and also qualifies for Section 80C deduction in subsequent years, except in the fifth and final year of maturity.
Loan collateral and premature encashment
NSC certificates can be pledged as security to commercial and cooperative banks to secure loans. Premature encashment is restricted and permitted only under exceptional statutory conditions, such as the death of the certificate holder or by court order.
Official source
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India Post, Ministry of Communications ↗Related on KisanPe
Common questions
What is the tenure of the National Savings Certificate?
The standard NSC (VIII Issue) has a fixed maturity period of five years.
Does NSC provide tax exemption under Section 80C?
Yes, investments up to one lakh fifty thousand rupees per year qualify for tax deduction under Section 80C.
Can NSC certificates be pledged for bank loans?
Yes, banks accept pledged NSC certificates as collateral security for business and agricultural loans.
General guidance, not personal advice. For your farm, ask your local Krishi Vigyan Kendra or agriculture officer.
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