Savings Schemes
by 5paisa Research Team Last Updated: 2022-11-25T15:55:28+05:30


A National Savings Scheme (NSS) is a government-sponsored savings instrument. Typically, a licensed financial institution operates this scheme. The main goal of such financial options is to mobilise savings and allow individuals to build up a sizeable wealth with small savings and low risk. Moreover, the returns of such schemes are frequently revised, but centralised backing makes them a safe investment option. 

Types of National Savings Scheme 2022

National Savings Schemes are known for their safety and assured returns due to government backing. It also comes with tax benefits in most cases. Typically, its classification is according to their beneficiary categories, like regular schemes for all, schemes for senior citizens, or a girl child. Each program has pre-determined eligibility criteria and offers different features and tax benefits. The targeted beneficiaries classify it into the following categories.

1.    Regular NSS Schemes

a.    Post Office Savings Account

The post office national savings scheme is a savings account with the Post Office instead of a bank. A tax benefit of up to Rs. 1,000 is provided in a financial year on the investment amount. This scheme does not have a defined maturity period.

b.    National Savings Recurring Deposit Account 

In this scheme, investors have to deposit a pre-determined monthly amount for at least five years, which can go up to 10 years. The primary advantage of this scheme is that there is no upper limit on the investment amount, whereas you can start as small as Rs. 100.

c.    National Savings Time Deposit Account

The Post Office alternative to fixed deposits in banks is known as the National Savings Time Deposit Account. The minimum required deposit is Rs. 1,000 and its multiples thereof with no cap on the upper limit. 

The maturity period can range between 1 to 5 years. The rate of interest is calculated every quarter but is payable annually. A tax rate is applicable in 5 year TD account under section 80C of the Income Tax Act.

d.    National Savings (Monthly Income Account) Scheme 

It is an alternate savings account for Indian residents. It generates a fixed income that accrues on the individual’s total investment over a tenure of 5 years. The government pre-determines the annual interest rate. 

You can start investing as small as Rs. 1,500 and go up to Rs. 4.5 lakh in an individual account, and with a joint account, the full corpus can go up to Rs. 9 lakhs. The interest is paid monthly in this scheme. This account can be prematurely closed after a year of account opening.

e.    Public Provident Fund 

It is an easy way to start your safe small savings. You must open a PPF account at the offering financial institution or a post office. You can invest tax-free as small as Rs. 500 up to a maximum of 1.5 lakhs in a financial year. The PPF tenure ranges between 15 to 20 years. You can avail of a loan against up to 25% of your deposits between the 3rd and 5th year of their account.

f.    Kisan Vikas Patra 

Also known as the KVP scheme, it is available through the Post Office issuance certificates and can help you generate significant earnings throughout your tenure. The maturity period is variable—the money doubles at maturity.  

The initial idea of this plan was to help farmers build a financial discipline. Indian citizens aged 18 years and above or trusts can benefit from the scheme by investing individually or collectively in the National Savings Scheme. This scheme excludes the NRIs and HUFs. 

Individuals can also invest in this savings plan on behalf of minors. There is a 30-month lock-in period, and early withdrawal is possible under certain conditions. You can use the Kisan Vikas Patra scheme as collateral to obtain secured loans from financial institutions.

g.    National Savings Certificate (VIII issue) 

National Savings Certificate or NSC is a fixed-income investment that can be opened individually or jointly with three adults at any post office. The NSC scheme encourages small and medium-income earners to mobilise their savings through investment while felicitating tax savings. 

Investment options have no maximum investment limit and can be started with a minimum amount of Rs. 1,000 and multiples of 100. It has a maturity of 5 years. You can use NSCs as collateral to avail of large loans from financial institutions. However, NRIs, HUFS, and trusts are ineligible to invest in this scheme. Tax rebate is available under section 80C of the Income Tax Act.

2.    For Senior Citizens

a.    Senior Citizens Savings Scheme (SCSS)

This scheme ensures post-retirement financial independence as it is one of the highest return-generating government schemes. Any Indian resident over 60 can avail of this scheme for a maturity period of up to 5 years. It can be closed prematurely. The deposit can start with a minimum investment of Rs. 1,000 with up to Rs. 15 lakhs. The interest is payable quarterly in SCSS. An income tax rebate is applicable under section 80C of the Income Tax Act.

b.    Pradhan Mantri Vaya Vandana Yojana (PMVVY)

This scheme provides a periodic income to senior citizens through a monthly pension. Individuals above 60 years can avail of this National Savings Scheme, which has a maturity of 10 years. There is a lock-in period of 30 days and a nominal stamp charge attached to the PMVVY scheme. This investment scheme can get you a secured loan for three years. However, it provides no tax benefits.

3.    For Girl Child

a.    Sukanya Samriddhi Yojana 

This national savings scheme is for Indian girls aged ten and below. Sukanya Samriddhi Yojna is one of the most affordable savings schemes, as individuals can open an account with as little as Rs. 250. However, an individual can invest only up to Rs 1.5 lakhs in a particular financial year. 

In particular, the girl's parents or guardians can open such an account at the nearest post office or licensed financial institution and contribute under the scheme for 21 years. Investors can withdraw 50% of the balance after the age of 18 years for higher education or after passing the 10th standard, whichever is earlier. 

The importance of his NSS in building resilient funds is undeniable, so investors should exercise caution when choosing the right savings plan. Additionally, individuals should consider eligibility criteria, financial requirements, and investment options to get the most out of these national savings plans.

A Gist of Some of the Most Popular National Savings Schemes 2022

Below are the most popular national savings scheme with their most defining features-


National Monthly Income Scheme

National Recurring Deposit Scheme



Minimum amount (Rs.)





Maximum amount (Rs.)

4.5 lakhs (individually)

9 lakhs (jointly)


1.5 lakhs


Interest rate (%)





Maturity (years)


5 (extendable after maturity with or without deposit till 10 years)

15 (extendable in a block of 5 years)


Joint account facility





Premature withdrawal facility

Allowed after a year from the account opening date

Allowed after three years from the account opening date

Allowed in some cases

Allowed in some cases

Tax benefits



Exempted under section 80C

Up to Rs. 1.5 lacs under section 80C

Open Free Demat Account
Resend OTP
Please Enter OTP
Account belongs to

By proceeding, you agree to the T&C.

Frequently Asked Questions

With the NSC scheme, you not only invest but also save on taxes. You can show NSC interest income while income tax return (ITR) filing is as follows.

●    NSC interest for the first four years may be claimed as an NSC investment deduction as it is reinvested in NPCs
●    Interest in the last year is taxable under “income from other sources” and is taxed under the applicable tax slabs of the individual

The investment amount into NSC falls under section 80C of the Income Tax Act. 1961.

National Savings Certificate (NSC) and Kisan Vikas Patra (KVP) are two different national savings schemes, and their betterment depends on many factors, such as

●    NSC is only available to Indian residents while KVP is available to both Indian residents as well as Trusts
●    You can start NSC with as low as Rs. 100 whereas KVP has a little higher minimum requirement of Rs. 1,000
●    The maturity of NSC and KVP is five years and 10+ years, respectively
●    Premature withdrawal is unavailable in NSC whereas you can do that after 30 months of starting KVP
●    While both the schemes provide loan facility, tax benefits are not associated with KVP
●    You have to subscribe to NSC only in post offices whereas you can subscribe to KVP in either a post office or a bank offering the scheme

NSC can be accessed from any Indian Post Office by following the below steps.

●    Visit your nearest branch and fill out the application form
●    Submit self-attested KYC documents. It is advisable to carry the original documents, too
●    Pay the investment amount in cash or cheque
●    Once you complete the purchase, you will receive the acknowledgement

The interest of the NSC scheme is calculated annually.

You can encash or redeem the NSC at any post office upon maturity. The post office should not necessarily be your base post office to claim the amount. However, you might need to submit a more detailed application. You must carry the following documents while encashing.

●    Original National Savings Certificate
●    ID Proof
●    NSC encashment form 

NSC and PPF are both government-backed National Savings Schemes that pose a minimal risk on investments. You can choose the better alternative by comparing the benefits and drawbacks to your objective. The major differentiating factors include.

●    You can hold a single or joint account under the NSC scheme. However, PPF does not support a joint account.
●    The tenure of NSC and PPF is five years and 15 years, respectively
●    Interest rate of PPF is slightly higher at 7.1% p.a. than NSC’s interest rate of 6.8% p.a.
●    You are allowed to open multiple accounts under NSC whereas only a single account is feasible in the PPF scheme
●    While the principal amount has the same tax benefits, interest is taxable under the NSC scheme

Once your NSC application form is submitted and KYC is processed successfully, the Post Office branch provides you with an NSC certificate.

You must notify the post office and select the online passbook service for your NSC account. Executives provide Internet banking credentials to log into your account and view all transaction details for your NSC account.