What is NSC?

The National Savings Certificate is a fixed income investment scheme that you can open with any post office. A Government of India initiative, it is a savings bond that encourages subscribers (mainly small to mid-income investors) to invest while saving on income tax. In this article, we cover the following info about NSC. Individuals mainly use NSC for small and medium investments as well as for tax-saving purposes. A fixed income instrument like Public Provident Fund and Post Office FDs, this scheme too is a secure and low-risk product. You can buy it from the nearest post office in your name, for a minor or with another adult as a joint account. They come with 2 fixed maturity periods – 5 years and 10 years. There is no maximum limit on the purchase of NSCs, but investments of up to Rs 1.5 lakhs in the scheme can earn a tax break under Section 80C of the Income Tax Act. The certificates earn a fixed interest, which is currently at the rate of7.6% per annum. They add this interest back to the investment and compound it annually. Many pledge these certificates for taking loans from banks.