Which is the Best Tax Saving Investment? - ELSS or National Saving Certificate

Which is the Best Tax Saving Investment? - ELSS or National Saving Certificate

by Nutan Gupta Last Updated: Oct 12, 2023 - 06:45 pm 224.9k Views
Listen icon

Equity Linked Saving Scheme (ELSS) and National Saving Certificate (NSC) are both tax-saving investments and are eligible for a tax deduction of up to Rs. 1.5 lakh under Section 80C of the Income Tax Act. Listed below are some of the differences between ELSS and NSC.

  ELSS National Saving Certificate
Investment ELSS is a type of mutual fund scheme where most of the fund corpus is invested in equities or equity-related products. NSC are bonds issued by the government for small savings and one can purchase these bonds from post offices.
Returns Not fixed, depend upon the performance of equity market. However, in the past, ELSS has given average returns of 12-14%. The interest rate on NSC is decided by the government every year. It is linked to the yield of 10-year government bonds.

The current interest rate is 8%.
Lock-in Period 3 years 5 years
Risk Factor ELSS carries some risk. However, research suggests that ELSS has given positive returns over a longer period of time. NSC carries low risk as the interest rate is fixed and it is backed by the Government of India.
Tax Liability In ELSS, the amount received at the end of maturity is not taxable. Interest earned on NSC is taxable
Liquidity One can withdraw money from ELSS anytime after 3 years. One can withdraw money from NSC anytime after 5 years.
Minimum Investment Rs. 500 Rs. 100

How do you rate this blog?


Start Investing in 5 mins*

Rs. 20 Flat Per Order | 0% Brokerage


About the Author

Open Free Demat Account
Resend OTP
Please Enter OTP
Mobile No. belongs to

By proceeding, you agree to the T&C.

Latest Blogs
Swing Trading Stocks: Week of 11 December 2023

Swing Trading Stocks for the Week

Weekly Market Outlook for 11 December to 15 December

The Nifty index soared to a historic high of 21000 mark during the end of the week and ended just below it with weekly gains of about three and half percent. The Bank Nifty index outperformed with participation from the heavyweights and posted weekly gains of over 5 percent. 

India's GDP is growing, did you get an appraisal?

“India will become the third largest economy by 2030”, said a report recently released by S&P Global. People buzzed about this news right away. While other countries are struggling with inflation and recession, India seems to be heading towards economic greatness. According to S&P, India is set to grow by 7 percent in the fiscal year 2026-27 and become the third-largest economy by 2030.