Can NRIs invest in National Savings Certificate (NSC) and avail tax benefits?

Becoming a Non-Resident Indian (NRI) affects your eligibility to invest in several small savings schemes, including the National Savings Certificate (NSC). The NSC is a favoured choice among Indians investors who prefer low-risk options since it is government-and offers an attractive interest rate.

Can NRIs invest in National Savings Certificate (NSC) and avail tax benefits?

While NRIs can invest in several investment schemes in India, such as stocks, mutual funds, fixed deposits (FD) and real estate, there are some investment paths that are off-limits for them. The eligibility criteria differ based on the type of investment and the regulations applicable to NRIs.



Also read: Can NRIs invest in RBI Floating Rate Savings Bonds offering 8.05% interest rate?


The NSC scheme is exclusively for resident citizens of India. Therefore, an NRI cannot make a new investment in the NSC. However, if they already have an NSC account, they can continue holding or managing it until it matures.

NSC interest rate

The NSC is offering an interest rate of 7.7% per annum for the July-September 2026 quarter. The government reviews interest rates of small savings schemes, including that of the NSC, every quarter.
The interest on the NSC is compounded annually but paid along with the principal at maturity.

Features of NSC

The minimum investment amount in an NSC account is Rs 1,000, and additional deposits can be made in multiples of Rs 100.
Investors can put in any amount they want since there's no cap on how much they can invest.
Plus, the amount invested in this scheme qualifies for tax deductions under the old tax regime, which makes it a great option for those looking to save on taxes in India.

Can an NSC account be closed prematurely?

An NSC account cannot be closed before maturity except in the following cases, namely:
On the death of the account holder in a single account, or any or all the account holders in a joint account.
On forfeiture by a pledge being a gazetted officer, when the pledge is in conformity with this scheme.
When ordered by a court.

Conditions when NSC account can be closed prematurely

If an NSC account is prematurely closed before the expiry of one year from the date of deposit, only the principal amount will be payable.
If an NSC account is prematurely closed after the expiry of one year but before the expiry of three years from the date of deposit, interest on the principal amount at the rate applicable to the Post Office Savings Account from time to time for complete months for which the account has been held, shall be payable.

Can an NSC account be extended?

Unlike many other post office small savings schemes such as the Public Provident Fund and the Senior Citizen Savings Scheme (SCSS), an NSC account can't be extended.