Definition
National Savings Certificate (NSC)
NSC is a fixed-income government savings bond sold at post offices, offering guaranteed returns and a Section 80C tax benefit.
The National Savings Certificate (NSC) is a post office savings instrument with a fixed tenure where you invest a lump sum and receive the principal plus compounded interest at maturity. The interest rate is set by the government each quarter and is locked in for your certificate's term.
The investment qualifies for Section 80C deduction. Notably, the interest accrued each year (except the final year) is reinvested and can itself be claimed under 80C, though the interest is taxable as income.
NSC offers sovereign safety and steady returns, suiting conservative savers who want a guaranteed, tax-advantaged fixed-income option, often compared with tax-saving FDs and KVP.
Related terms
- Section 80CSection 80C allows a deduction from taxable income for specified investments and expenses, such as EPF, PPF, ELSS, life insurance premiums and home-loan principal, under the old regime.
- Kisan Vikas Patra (KVP)KVP is a post office savings certificate that doubles your invested money over a fixed period at a government-set interest rate.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.