National Savings Scheme is a financial program introduced by the Government of India to encourage savings among the citizens and provide them with safe investment options to eventually build a substantial corpus. This scheme is operated by authorised financial institutes. The NSS offers various saving schemes with attractive interest rates and flexible terms to suit the diverse needs of savers. Let us learn about NSS in detail before applying for this scheme.
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The full form of NSS is National Savings Scheme. It is a government-backed savings plans that helps individuals to mobilise savings and build a large corpus. Also, NSS provides tax-saving opportunities to investors.
Under this scheme, the return rates are revised on a frequent basis while centralized support and back-up makes them an ideal investment option.
The National Savings Scheme is a good option for small and medium-income investors who are looking to save for a variety of goals, such as retirement, education, or a home.
You can easily opt for these schemes through authorized post offices and banks.
Following is a list of features and benefits of NSS:
Security: NSS is a government backed scheme so the risk of losing the principal investment or suffering from a loss is removed. This important feature helps beginners and risk-averse investors to accept a responsible strategy towards saving the amount without the worry of ruining it.
Assured Returns: Under the NSS scheme, the returns are announced before investments and they are assured. Moreover, they are not associated with market risks that make sure the fixed returns to the investors. Hence, it helps in saving more.
High Returns: The return rates on these plans are quarterly. This is mainly done to help individuals earn returns based on inflation and make most of their investments.
Tax Benefits: These schemes come with tax-savings benefits u/s 80C that inculcate the habit of financial discipline and encourages saving more.
The scheme is divided into different categories depending on the beneficiaries: - Regular NSS Schemes, Schemes for girl child and Savings plan for senior citizens. Here is a list of types of NSS:
Sukanya Samriddhi Yojana (SSY)
Senior Citizen Savings Scheme (SCSS)
Public Provident Fund Account (PPF)
Mahila Samman Savings Certificate
National Saving Monthly Income Scheme
National Savings Certificate (NSC VIII Issue)
Post Office Saving Account
National Saving Recurring Deposit Scheme
National Saving Time Deposit Scheme
Kisan Vikas Patra
The key features of various schemes offered under the National Savings Scheme are as follows
|Name of the Scheme||Eligibility Criteria||Maturity Period||Interest Rate||Deposit Amount Limit||Premature Withdrawal/ Closure Facility||Tax Benefits|
|Sukanya Samriddhi Yojana (SSY)||
||21 Years||8.0% p.a.||Rs. 250 - Rs. 1.5 lakhs in a F.Y.||
|Senior Citizen Savings Scheme||
||5 Years||8.2% p.a.||Rs. 1000 - Rs. 30 lakhs||
|Public Provident Fund (PPF) Scheme||
||7.1% p.a.||Rs. 500 - Rs. 1.5 lakhs in a F.Y.||Available once a year after 5th F.Y.||
|Mahila Samman Savings Certificate||
||2 years||7.5% p.a.||Rs. 1000 (thereof, in multiples of Rs. 100) – Rs. 2 lakhs||
||Income Tax Deductions u/ Sec. 80C of the I.T. Act|
|National Savings (Monthly Income Account) Scheme||
||5 Years||7.4% p.a.||
||Premature closure is allowed after completion of 1 year||Income Tax Deductions u/ Sec. 80C of the I.T. Act|
|National Saving Certificate (VIII issues)||
||5 Years||7.7% p.a.||Rs. 1000 (thereof, in multiples of Rs. 100) – No Limit||Premature closure allowed||Income Tax Deductions u/ Sec. 80C of the I.T. Act|
|Post Office Savings Scheme||
||Rs. 500 – No Limit||Available||Tax-free interest up to Rs. 10,000 u/ Sec 80TTA|
|National Savings Recurring Deposit Account||
||5 Years||6.2% p.a.||Rs. 100 per month (thereof, in multiples of Rs. 10) - No Limit||Can be prematurely closed after 3 years||Income Tax Deductions u/ Sec. 80C of the I.T. Act|
|National Savings Time Deposit Account||
||1 Year 2 Year 3 Year 5 Year||
||Rs. 1000 (thereof, in multiples of Rs. 100) - No Limit||Allowed after 6 months of Fixed Deposit (F.D.) account||5-Year F.D.: Tax rebate u/ Sec 80C of I.T. Act|
|Kisan Vikas Patra||
||Decided by the Government of India periodically||7.5% p.a. (Deposits double after 9 years and 7 months)||Rs. 1000 (thereof, in multiples of Rs. 100) – No Limit||Available||Income Tax Deductions u/ Sec. 80C of the I.T. Act|
*F.Y.: Financial Year
|Name of Scheme||Interest Rates for Financial Year 2022 -23 (in % p.a.)|
|April-June 2022||July-Sep 2022||Oct-Dec 2022||Jan-Mar 2023||April-June 2023|
|1-Year Time Deposit||5.5%||5.5%||5.5%||6.6%||6.8%|
|2-Year Time Deposit||5.5%||5.5%||5.7%||6.8%||6.9%|
|3-Year Time Deposit||5.5%||5.5%||5.8%||6.9%||7.0%|
|5-Year Time Deposit||6.7%||6.7%||6.7%||7.0%||7.5%|
|5 Year Recurring Deposit||5.8%||5.8%||5.8%||5.8%||6.2%|
|5 Year Senior Citizens Savings Scheme||7.4%||7.4%||7.6%||8.0%||8.2%|
|5 Year Monthly Income Account||6.6%||6.6%||6.7%||7.1%||7.4%|
|5 Year National Savings Certificate||6.8%||6.8%||6.8%||7.0%||7.7%|
|Public Provident Fund||7.1%||7.1%||7.1%||7.1%||7.1%|
|Sukanya Samriddhi Account Scheme||7.6%||7.6%||7.6%||7.6%||8.0%|
|Kisan Vikas Patra||6.9% (will mature in 124 months)||6.9% (will mature in 124 months)||7.0% (will mature in 123 months)||7.2% (will mature in 120 months)||7.5% (will mature in 115 months)|
|Mahila Samman Savings Certificate||--||--||--||--||7.5%|
*w.e.f. 1st April 2022 onwards
Let us learn about the plans provided under National Savings Schemes in detail from the list mentioned below:
The Sukanya Samriddhi Yojana (SSY) is a government-backed savings scheme in India that aims to encourage parents to save for the education and marriage expenses of their girl child.
Features of Sukanya Samriddhi Account (SSA):
Documents Required: The parents or legal guardians need to submit the following necessary documents,
Birth certificate of the girl child
Identity proof of the girl child
Scheme Availability: Account can be opened at any post office or authorized bank branches
Higher Interest Rates: The interest rate is usually higher than that offered by other small savings schemes
Number of Accounts: Maximum one account per girl child is allowed
Interest Compounding: The interest is compounded annually
Tenure: The SSA has a tenure of 21 years from the date of opening the account
Transfer of Control of SSA: The girl child will manage the account after attaining the age of 18 years.
Premature Account Closure: Premature closure of SSA is allowed after completion of 5 F.Y. on the following conditions-
Critical disease to the account holder
Upon the death of the guardian who operated the SSA account
SSA Closure on Maturity: The SSA account will mature after 21 years from the date of opening or when the girl child gets married after the age of 18 years
The Senior Citizens Savings Scheme (SCSS) is a financial savings scheme offered by the Government of India to provide regular income and financial security to senior citizens.
Features of Senior Citizens Savings Scheme (SCSS):
Account Type: Single or jointly with a spouse
Exclusions: Non-Resident Indians (NRIs) and Hindu Undivided Families (HUFs) are not eligible
Limitation on Investment: The investment amount should not exceed the amount received on retirement or superannuation
Interest Rate Payment: The interest earned is payable quarterly
Tenure: The SCSS has a fixed tenure of 5 years, which can be extended for an additional 3 years after maturity
Monthly Income: Interest earned on the investment is paid out as a regular income to the account holder
Taxation: TDS is levied if interest is higher than Rs. 50,000 per year
The Public Provident Fund (PPF) is a popular long-term savings scheme in India. It is a government-backed investment option that provides individuals with a safe and reliable way to accumulate funds for their future needs.
Features of Public Provident Fund (PPF):
Exclusion: Non-resident Indians (NRIs) are not eligible to open new accounts. But, the NRIs who opened an account while being a resident can continue to operate it until maturity.
Long-Term Plan: Encourages savings among individuals and promotes a culture of long-term financial planning
Periodic Interest Rate Update: The government of India quarterly declares the interest rate for PPF deposits
PPF Interest Payment: Interest is payable at the end of every Financial Year
High Interest Rate: It offers a higher interest rate than NSC
Partial Withdrawal Facility: Partial withdrawals of up to 50% of PPF funds are allowed after 5th year onwards
Loan Against PPF Fund: You can avail of a loan facility once a year for up to 25% of your PPF balance after 2nd F.Y and before 5th F.Y of opening the PPF account
The Mahila Samman Savings Certificate (MSSC) is a government-backed savings scheme for women in India. It was launched in April 2023 as part of the Union Budget 2023-24. The scheme offers a fixed interest rate of 7.5% p.a. for a tenure of 2 years.
Features of Mahila Samman Savings Certificate (MSSC):
One-Time Investment: MSSC is a one-time investment scheme, which means that you can only invest once
Purchase of Certificates: You can open an MSSC account at any post office in India
Number of Certificates: More than one certificate can be bought per eligible individual
Interest Payment: The interest on the MSSC is compounded quarterly and paid on maturity in a lump sum
Premature Closure: Allowed on the death of certificate holder or extreme compassionate grounds (critical disease/ death of guardian). Premature closure is also allowed after 6 months of the account without specifying the reason.
Safety and Security of Deposits: The MSSC is a safe and secure investment option as it is backed by the government of India
The National Savings Monthly Income Scheme (MIS) is a pension plan offered by the Government of India through the Department of Posts. It is designed to provide a regular monthly income to individuals for their retirement years.
Features of National Savings Monthly Income Account:
Interest Rate Payment: The annual interest rate is paid monthly
Premature Withdrawal Facility: Premature withdrawals are permitted after one year, subject to certain conditions
Interest Payment: The interest is credited monthly
Monthly Income: The interest earned on the investment is paid out as a monthly income to the account holder
Nomination Facility: The MIS scheme offers a nomination facility
The National Savings Certificate is a savings instrument that comes with several features to make it an attractive investment option for you.
Features of National Savings Certificate (NSC):
Number of Certificates: More than one certificate can be bought per eligible individual
Guaranteed Returns: The principal amount and the interest earned are guaranteed by the government
Periodic Interest Rate Update: Offers a fixed interest rate that is determined by the government on a quarterly basis
Tenure: NSC has a fixed maturity period of 5 years
Lock-in Period: The investment remains locked in until the maturity period
Maturity Returns: You receive the principal amount along with the accrued interest at the end of maturity
Transferability of Certificate: The certificate can be transferred from one person to another under certain conditions
Loan Against NSC: The National Savings Certificate can be used as collateral for loans
Post Office Savings Scheme refers to a range of savings schemes offered by the Indian Postal Service in collaboration with the Government of India. These schemes provide individuals with various options to deposit their savings and earn interest.
Features of Post Office Savings Account:
Purpose: The Post Office Savings Scheme aims to encourage individuals, especially those from rural areas, to save money and provide them with secure and accessible investment opportunities
Account Type: Individual and Joint Account
Interest Payment: The interest is credited annually
Withdrawals and Deposits: can withdraw money in cash or opt for account-to-account transfers or issue withdrawal slips
Passbook: Each Post Office Savings Account holder is provided with a passbook that records the account transactions, including deposits, withdrawals, and interest earned
Nomination Facility: The Post Office Savings Account allows account holders to nominate a person who would be entitled to receive the account balance in the event of the account holder's demise
The National Savings Time Deposit Scheme is a savings scheme offered by the Government of India through the Department of Posts. It is designed to provide a safe and secure investment option for individuals who wish to earn fixed returns on their savings over a specified period.
Features of National Savings Time Deposit Account:
Account Types: Single Account and Joint Account with Spouse
Investment Tenure: Offers Fixed Deposit scheme tenures of 1/ 2/ 3/ 5 years based on their preference and financial goals
Interest Payment: Interest is calculated on a quarterly basis and is payable annually
Compound Interest Rates: The interest rates are compounded on a quarterly basis and are generally higher compared to regular savings accounts
Premature Withdrawal: Premature withdrawal of the deposit is allowed after completion of 6 months with revised interest rates, subject to certain conditions
Nomination Facility: Depositors can nominate a person to receive the maturity amount or in the event of the depositor's death
The National Savings Recurring Deposit Scheme is a government-backed savings scheme offered through the Department of Post. It is a recurring deposit scheme that encourages individuals to save regularly and build up their savings over time.
Features of National Savings Recurring Deposit Account:
Interest Rate Payment: The interest is compounded quarterly and credited annually
Duration: The scheme has a fixed tenure of 5 years. The monthly deposit amount and term are pre-determined at the time of account opening.
Nomination Facility: Account holders can nominate one or more individuals to receive the maturity amount in case of the account holder's death
Loan Facility: Account holders can avail of a loan of up to 50% against their National Savings Recurring Deposit account after completing 1 year
Premature Closure: Premature closure of the R.D. account is allowed with lower interest rates after 3 years of account opening
Kisan Vikas Patra is a popular investment option that allows individuals to invest a lump sum amount and earn fixed interest over a specified period.
Features of Kisan Vikas Patra:
Purpose: The scheme aims to provide a safe and secure investment avenue for individuals, particularly farmers and small savers
Interest Rate: The interest rate for Kisan Vikas Patra is fixed by the government periodically, and it is compounded annually
Withdrawals and Premature Closure: premature closures are allowed after a lock-in period of two and a half years, subject to certain conditions and penalties
Transferability of Certificates: Kisan Vikas Patra is issued by post offices or authorized financial institutions as a physical certificate. The certificates can be transferred from one person to another, subject to specific procedures and requirements
Nomination Facility: The scheme allows for the nomination of an individual who would be entitled to receive the proceeds of the Kisan Vikas Patra in the event of the investor's death
The documents required for the National Savings Scheme (NSS) vary depending on the scheme you are investing in. However, some common documents that you may need to provide are as follows:
|Proof of Income||
Follow the steps mentioned below to learn how to invest in National Savings Schemes (NSS):
Step 1: Choose a scheme
There are several NSS schemes available, each with its own features and benefits. You can choose the scheme that best suits your needs.
Step 2: Open an account
You can open an account at any post office in India. You will need to provide some essential KYC documents, such as:
Step 3: Make a deposit
You can deposit any amount in an NSS account. The deposit limits are mentioned in this article.
Step 4: Get the certificate
Once you have made a deposit, you will be issued a certificate or passbook, as per the scheme. These documents will be the proof of your investment.
Step 5: Enjoy the benefits
NSS schemes offer several benefits, including:
Fixed interest rate
By participating in NSS, individuals can secure their financial future, earn steady returns, and contribute to the overall development of the country. National Savings Schemes serve as a reliable platform for individuals to save, invest, and actively participate in their own financial well-being and the progress of the nation.
National Savings Certificate (NSC)
Public Provident Fund (PPF)
Sukanya Samriddhi Yojana (SSY)
Mahila Samman Savings Certificate (MSSC)
Senior Citizens Savings Scheme (SCSS)
Post Office Time Deposit (TD)
|Name of Scheme||Interest Rates (in %p.a.)|
|1-Year Time Deposit||6.8%|
|2-Year Time Deposit||6.9%|
|3-Year Time Deposit||7.0%|
|5-Year Time Deposit||7.5%|
|5 Year Recurring Deposit||6.2%|
|5 Year Senior Citizens Savings Scheme||8.2%|
|5 Year Monthly Income Account||7.4%|
|5 Year National Savings Certificate||7.7%|
|Public Provident Fund||7.1%|
|Sukanya Samriddhi Account Scheme||8.0%|
|Kisan Vikas Patra||7.5% (will mature in 115 months)|
|Mahila Samman Savings Certificate||7.5%|
Security: National savings schemes are backed by the government, which means that your investment is safe and secure.
Guaranteed returns: National savings schemes offer guaranteed returns, which means that you know how much you will earn on your investment.
Tax benefits: National savings schemes offer tax benefits, which can help you save money on your income tax bill.
Flexibility: National savings schemes offer a variety of investment options, which gives you the flexibility to choose the option that best suits your needs.
Past 10 Year annualised returns as on 01-12-2023
^Tax benefit are for Investments made up to Rs.2.5 L/ yr and are subject to change as per tax laws.
*All savings are provided by the insurer as per the IRDAI approved insurance plan.
Tax benefit is subject to changes in tax laws. Standard T&C Apply
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