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National Savings Certificate

National Savings Certificate

National Savings Certificate

Savings is inevitable for those who wish to lead a prosperous life with better amenities and facilities in the future. The Government of India launched the National Savings Certificate (NSC) for increasing the savings of people by providing them tax exemptions for interest. The investment scheme duration for National Savings Certificate should be inclusive of a maturity period of five years. This article discusses the benefits, features and application procedure of NSC in detail.

Objective of the Scheme

Many options are available for the purpose of savings, and the eligible person can choose any as per the financial goal. The primary intention of the scheme is to provide the people  with an opportunity to open a savings investment in a manner which is simple. Thus, the National Savings Certificate investment scheme can be opened by an individual at any post office in the country.

Features of the National Savings Certificate

  • This certificate can be held by an individual or as a joint investment.
  • This kind of a savings investment is meant for individuals only.
  • Groups of people like trusts, companies or Hindu Unified Families are not eligible.
  • The scheme enables a Representative to avail the NSC on behalf of a minor.
  • The minimum amount prescribed for an investment in an NSC is Rs. 100.
  • Under NSC issue IX,  the investments are disbursed in the denominations of Rs. 100, Rs. 1000, Rs. 5,000 and Rs. 10,000.
  • Encashment procedure will be undertaken at the post office only.

Types of  National Savings Certificate (NSC)

There are two types of NSC, namely NSC issue VIII and NSC issue IX. We’ll examine them in brief:

NSC Issue VIII: This is a better investment avenue for those who want to enjoy secured investments and expect tax benefits. Any individual can obtain these certificates except HUFs. The denomination range for this certificate is Rs. 100 to Rs. 10,000.  The maturity period of this certificate consists of five years.

NSC Issue IX: The denomination is ranged from Rs. 100 to Rs. 10,000 but the interest, while comparing with issue VIII is considered to be slightly higher. The maturity period of this certificate consists of ten years.

Type of NSC Holders

Joint ‘A’: This Joint ‘A’ certificate is applicable to two adult holders and will be paid to both when the scheme is matured.  For transfer or cancellation or even for  nomination, the signature of both the holders would be needed.

Joint ‘B’: The Joint ‘B’ certificate is the same as Joint ‘A’, but differs in the payment of maturity value. Hence, the maturity value will be given to any one of the two account holders.

Single Holder: This Single Holder Certificate applies to an adult, or an adult on behalf of a minor. It enables the individual to hold the account to himself.

Benefits on Investment

This scheme allows complete free taxation on interest except for earned interest in the last year. No upper limit has been mentioned for the investment. Duplicate certificates will be arranged in case of losing the original. Section 80C of the Income Tax Act allows investment tax benefits to the investment holders. If the interest is earned, the amount reinvested in the scheme will enhance the invested amount.

Documents Required

 The applicant should submit the proof identity and the proof of address while applying for the National Savings Certificate.


The scheme could only be availed if the maturity period of the investment is five years or more. The nominee can claim to withdraw the investment amount before the maturity period if the NSC holder has died or if the court order prescribes to avail it prematurely.

Apply for NSC

The NSC Certificate could be obtained by the applicant in the following manner:

Step 1: Fill up the NSC application form, by obtaining it from the post office.


Step 2: Submit the required documents.

Step 3: Nominate a beneficiary for the investment.

Step 4: Make the payment for the investments that you are willing to make. This payment could be made be via cheques or even via a demand draft.

Step 5: Receive the certificates from the post office and check for any clerical or mathematical errors. If any errors are identified, rectifications could be made.

Fee Structure

For issuing a National Savings Certificates, a fee of Rs. 5 will be charged in the following scenarios :

  • Change in the denomination of the certificate.
  • Obtaining a duplicate certificate.
  • The nomination is made after the certificates have been purchased.
  • On change of submission.
  • Transferring a certificate to another person or an entity.