What is National Savings Certificate Interest Rate in 2026?

NSC is a saving instrument wherein both the initial deposit and accrued NSC interest are subject to a tax deduction under section 80C of the Income Tax Act.

In case, the amount is not claimed as a deduction, interest on NSC is taxable according to the applicable income tax slab rate. In this case, the interest earned from NSC is added to the investor’s total income for the financial year under the head “Income from Other Sources”.

However, NSC is not an Exempt-Exempt-Exempt (EEE) investment unlike the popular Public Provident Fund. NSC interest received by the investor at maturity i.e. at the end of the 5th year is added to the investor’s income for the financial year under the head “Income from other Sources” and taxed as per the applicable income tax slab rate.

National Savings Certificate, NSC is a saving cum investment instrument that offers fixed returns, according to the NSC interest rate set by the Government of India. As the interest rate is fixed for a duration, the returns are guaranteed, making NSC most suitable for individuals who desire to build a corpus with the lowest risk possible.

That said, National Savings Certificate can be ideal for conservative investors, or senior citizens who cannot afford to take high risks. Additionally, being a government-backed saving scheme, there is no risk of default.

NSC can be bought by any individual, given that they are lawful citizens of India. Non-Resident Indians (NRI), and Hindu Undivided Family (HUF) are not eligible for buying National Savings Certificate. Additionally, NSC can be bought individually, or on behalf of a minor.

There are three types of NSC accounts – Individual, joint certificate A and Joint certificate B. Joint A is a category set up for three adults, payable to holders jointly. Whereas NSC Joint certificate B is for three adults, payable to either of the survivor.