When it comes to safe and secure investment options in India, the National Savings Certificate (NSC) offered by the Post Office stands out. With a guaranteed return, government backing, and attractive interest rate, the NSC is increasingly becoming a go-to choice for conservative investors. But can this humble savings scheme actually make you a crorepati (millionaire) in just 5 years?
National Savings Certificate (NSC) 2025
| Feature | Details |
|---|---|
| Scheme Name | National Savings Certificate (NSC) |
| Backed by | Government of India via India Post |
| Interest Rate (April–June 2025) | 7.7% per annum (compounded annually) |
| Maturity Period | 5 years |
| Minimum Investment | ₹1,000 |
| Maximum Limit | No upper limit (but only ₹1.5 lakh is eligible for tax benefit) |
| Tax Benefit | Up to ₹1.5 lakh under Section 80C |
| Official Website | India Post NSC |
The National Savings Certificate is a trusted and powerful tool for secure, mid-term wealth creation. While becoming a millionaire via NSC alone in 5 years requires a large upfront investment, using it strategically for tax savings and guaranteed returns can still significantly boost your financial health.
Whether you’re looking to save taxes, grow your money safely, or plan for your child’s future, NSC can play a crucial role in your investment mix.
What Is National Savings Certificate (NSC)?
The National Savings Certificate is a fixed income investment scheme available at all post offices across India. It is designed for small to mid-level investors who want a secure way to grow their savings.
Think of it as a guaranteed return savings plan—you invest a lump sum today, and after 5 years, you receive your initial amount plus interest. The compounded annual interest makes it more rewarding than many traditional bank FDs.
It’s especially popular among:
- Government employees
- Salaried individuals
- Retirees
- Parents saving for children’s education
see also: If You Miss 3 Consecutive Installments of SIP, You May Incur a Huge Loss
NSC Interest Rate and Returns in 2025
For Q1 FY 2025-26 (April to June), the NSC interest rate is 7.7% per annum, compounded annually.
This means if you invest ₹1 lakh today, here’s how it grows:
| Year | Amount at Year-End (Approx.) |
|---|---|
| Year 1 | ₹1,07,700 |
| Year 2 | ₹1,15,638 |
| Year 3 | ₹1,24,040 |
| Year 4 | ₹1,33,011 |
| Year 5 | ₹1,42,675 |
Final amount after 5 years: ₹1,42,675
So, a ₹1 lakh investment grows to ₹1.42 lakh—not bad for a secure, tax-saving instrument.
Can NSC Make You a Crorepati in 5 Years?
Let’s tackle the million-rupee question.
To accumulate ₹1 crore in 5 years through NSC, you’d need to invest a lump sum of approximately ₹69.5 lakh, assuming the 7.7% interest rate continues and all the interest is reinvested.
Why ₹69.5 Lakh?
Here’s the math:
- Using the compound interest formula:
A = P(1 + r)^n - Where:
- A = ₹1 crore
- r = 7.7% or 0.077
- n = 5 years
- Solving for P (principal) gives you around ₹69.5 lakh
Reality Check: That’s a big amount for most investors. So while technically possible, it’s not feasible for everyone.
However, don’t be disheartened. You can still use NSC as a powerful wealth-building tool by investing smaller amounts consistently, or combining it with other instruments like PPF, Mutual Funds, or SIP.
Step-by-Step Guide – How to Invest in NSC
Step 1: Visit a Nearby Post Office
Go to any India Post Office branch. NSC is available in all urban, semi-urban, and rural branches.
Step 2: Submit Required Documents
Bring:
- Aadhar Card
- PAN Card
- Passport-size photo
- Address proof
Step 3: Choose Investment Amount
Minimum ₹1,000, and in multiples of ₹100. No maximum limit.
Step 4: Choose Account Type
You can open:
- Single Account
- Joint Account (up to 3 adults)
- Minor Account (via guardian)
Step 5: Deposit and Get Certificate
Once you deposit the amount, you’ll receive a certificate (digital or paper) stating your maturity value and interest rate.
Tax Benefits of NSC
The NSC provides excellent tax advantages:
1. Tax Deduction under Section 80C
You can claim up to ₹1.5 lakh per year on your NSC investment.
2. Interest Is Also Tax Deductible
Every year, the accrued interest (except final year) is reinvested and counted as a fresh investment—so you can claim that under 80C too.
3. Final Year Interest Is Taxable
The interest earned in the 5th year is taxable, so plan your tax filing accordingly.
Who Should Invest in NSC?
Low-risk investors
Perfect for those who prefer guaranteed returns over volatile equity markets.
Taxpayers
Get the most out of the ₹1.5 lakh deduction under Section 80C.
Retirees or senior citizens
Safe investment with better returns than most FDs.
Parents saving for children
Start a minor account and lock in returns for education or marriage planning.
see also: Post Office Scheme: Deposit ₹60,000, Get Funds Worth More Than ₹16,27,284
Alternatives to NSC (For Higher Returns)
If your goal is wealth creation and you can tolerate some risk, consider these options alongside NSC:
| Investment Option | Returns (Approx.) | Lock-in | Tax Benefit |
|---|---|---|---|
| PPF | 7.1% | 15 years | Yes |
| ELSS Funds | 10–14% | 3 years | Yes |
| Mutual Funds SIP | 12–15% | Flexible | No |
| Bank FD | 6.5–7.5% | 1–5 years | Limited |
Smart Tip: Combine NSC with ELSS for a balance of safety and growth.
National Savings Certificate FAQs
Q1. Is NSC better than PPF?
Both are great schemes. NSC has a shorter tenure (5 years) and fixed returns, while PPF offers long-term tax-free returns over 15 years.
Q2. Can I withdraw NSC early?
Premature withdrawal is not allowed, except in rare cases like:
- Holder’s death
- Court orders
- Forfeiture by pledgee (in case of loan)
Q3. Is NSC interest taxable?
Yes. Interest is taxable in the 5th year, but interest from previous years is eligible under 80C.
Q4. Can I invest online in NSC?
Currently, NSC investment must be done physically at a post office. Online purchase is not yet available via internet banking.
Q5. Can NRIs invest in NSC?
No, NRIs are not eligible to invest in NSC.
