National Savings Scheme (NSS)

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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What is NSS?

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.

Benefits and Features of the National Savings Scheme (NSS)

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.

Types of National Saving Scheme (NSS)

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)	Opened by parents/ legal guardians for a girl child Age of girl child: < 10 years of age For a Maximum 2 girl children per family	21 Years	8.0% p.a.	Rs. 250 - Rs. 1.5 lakhs in a F.Y.	Can withdraw 50% of the balance At the age of 18 years or upon passing Class 10th	Income Tax Deductions u/ Sec. , 196180C of the I.T. Act Tax-free interest
Senior Citizen Savings Scheme	Senior Citizens: 60 years & above Superannuation/ VRS/ Special VRS Retirement: 55-60 years of age Ex-Servicemen from Defence Services: 50 years of age	5 Years	8.2% p.a.	Rs. 1000 - Rs. 30 lakhs	Interest payable quarterly	Tax deductions of up to Rs. 1.5 lakhs On the payment of the annual premium Available u/ Section 80C of the I.T. Act
Public Provident Fund (PPF) Scheme	Resident Individual Citizens Minor and Persons of Unsound Mind (Through a Guardian)	15 Years Extendable after maturity in a block of 5 years	7.1% p.a.	Rs. 500 - Rs. 1.5 lakhs in a F.Y.	Available once a year after 5th F.Y.	Income Tax Deductions u/ Sec. 80C of the I.T. Act Tax-free interest
Mahila Samman Savings Certificate	Woman for herself By a parent/ guardian for their girl child	2 years	7.5% p.a.	Rs. 1000 (thereof, in multiples of Rs. 100) – Rs. 2 lakhs	Partial withdrawal after 1 year is allowed Up to 40% of the balance	Income Tax Deductions u/ Sec. 80C of the I.T. Act
National Savings (Monthly Income Account) Scheme	Resident Individual Citizens Up to 3 Adults Jointly Minor (age > 10 years) Minor and Persons of Unsound Mind (Through a Guardian)	5 Years	7.4% p.a.	Single Account: Rs. 1000 - Rs. 9 Lakhs Joint Account: Rs. 1000 - Rs. 15 Lakhs	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)	Resident Individual Citizens Up to 3 Adults Jointly Minor (age > 10 years) Minor and Persons of Unsound Mind (Through a Guardian)	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	Individuals Two Adults Jointly Minor (age > 10 years) Minor and Persons of Unsound Mind (Through a Guardian)	NA	4.0% p.a.	Rs. 500 – No Limit	Available	Tax-free interest up to Rs. 10,000 u/ Sec 80TTA
National Savings Recurring Deposit Account	Resident Individual Citizens Up to 3 Adults Jointly Minor (age > 10 years) Minor and Persons of Unsound Mind (Through a Guardian)	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	Resident Individual Citizens Up to 3 Adults Jointly Minor (age > 10 years) Minor and Persons of Unsound Mind (Through a Guardian)	1 Year 2 Year 3 Year 5 Year	1 Year: 6.8% p.a. 2 Year: 6.9% p.a. 3 Year: 7.0% p.a. 5 Year: 7.5% p.a.	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	Resident Individual Citizens Up to 3 Adults Jointly Minor (age > 10 years) Minor and Persons of Unsound Mind (Through a Guardian)	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

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*F.Y.: Financial Year

National Savings Scheme - Interest Rates for Financial Year 2022-23

Name of Scheme	Interest Rates for Financial Year 2022 -23 (in % p.a.)
Name of Scheme	April-June 2022	July-Sep 2022	Oct-Dec 2022	Jan-Mar 2023	April-June 2023
Savings Account	4.0%	4.0%	4.0%	4.0%	4.0%
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

10 NSS Schemes – All You Need to Know

Let us learn about the plans provided under National Savings Schemes in detail from the list mentioned below:

Sukanya Samriddhi Yojana (SSY)

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
  - Address proof
- 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
Senior Citizens Savings Scheme (SCSS)

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
Public Provident Fund (PPF)

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
Mahila Samman Savings Certificate (MSSC)

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
National Savings Monthly Income Scheme (MIS)

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
National Savings Certificate (NSC- VIII Issue)

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):
- Exclusion: Non-resident Indians (NRIs) and Hindu Undivided Families (HUF) are not eligible
- 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 Account

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
National Savings Time Deposit Scheme

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
National Savings Recurring Deposit Scheme

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

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

What are the Documents Required for NSS?

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:

Particulars	Documents Required
Identity Proof	Passport Driver's License Voter ID Card
Address Proof	Utility Bills (Electricity bill, Telephone bill) Bank Statement Rent Agreement
Proof of Income	Salary slip Income Tax Return (ITR)
Nominee Details	ID Proof of Nominee Address proof
Additional Documents	Passport-size Photograph Completed Application Form

How to Invest in National Savings Schemes

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:

PAN card
Aadhaar card
I.D. Proof
Address proof

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
Tax benefits
Security
Liquidity

Wrapping It Up

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.

FAQ's

What is the full form of NSS?

The full form of NSS is National Savings Scheme.
What are national savings schemes?
A national savings scheme is a government-backed investment product that is designed to encourage people to save money. Some of the most popular national savings schemes include:
- 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)
What is a 5-year national saving scheme?

The 5-year National Savings Scheme (NSC) is a government-backed investment product that offers a guaranteed return of interest. The interest rate on the NSC is fixed by the government and is currently 7.7% per annum. The NSC has a maturity period of 5 years, after which the amount invested, along with the accrued interest, can be withdrawn.

What is the interest rate on National Savings Scheme?

Listed below are the interest rates for various National Savings Schemes:

Name of Scheme	Interest Rates (in %p.a.)
Savings Account	4.0%
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%

What are the benefits of a National Saving Scheme?
National savings schemes offer a variety of benefits, including:
- 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.

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^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.

*All savings are provided by the insurer as per the IRDAI approved insurance plan.

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^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

#The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 1 Cr. is for a 30 year old healthy individual investing Rs 10,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: ₹1,05,02,174 @ CARG 8%; ₹50,45,591 @ CAGR 4%

¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.

**Returns are based on past 10 years’ fund performance data (Fund Data Source: Value Research).

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