What is the Difference Between NSC and RBI Bonds?

What Is National Savings Certificate (NSC)?

What Are RBI Bonds?

What Are the Differences Between NSC and RBI Bonds?

Even though both National Savings Certificate (NSC) and RBI Bonds are government-backed, they have several differences, as stated below in the given table:

Parameters

National Savings Certificate (NSC)

RBI Bonds

Maturity Period

The maturity period of the National Savings Certificate (NSC) is five years.

The maturity period of RBI Bonds is seven years.

Minimum Amount

The minimum amount required while investing in NSC is ₹100.

The minimum amount required while investing in RBI Bonds is ₹1000.

Interest Rate

The rate of interest in NSC is 7.70% per annum.

The rate of interest in RBI Bonds is 8.05% per annum.

Issuance

The Indian Postal Service issues the National Savings Certificate (NSC).

RBI Bonds are issued by the Reserve Bank of India (RBI).

Interest Payments

Cumulative interests are paid on maturity.

Cumulative or non-cumulative interest rates are paid every six months.

Loan Facility

The National Savings Certificate (NSC) can be collateralised to get loans.

The RBI Bonds cannot be offered as collateral.

Tax Benefits

You are entitled to tax benefits on investments up to ₹1.5 Lakhs as per Section 80C.

There are no tax benefits on the investments in RBI Bonds.

What Are the Common Benefits of NSC?

What Are the Common Benefits of RBI Bonds?

FAQs About NSC Vs RBI Bonds

What is the NSC Certificate Number? up-arrow

Every issued NSC certificate has a unique certificate number containing essential information, such as the post office branch from which it was issued. The NSC Certificate Number is easily noticeable on the certificate, which is used to check the genuineness and validity of NSC investment.

Is the NSC interest rate fixed or floating? up-arrow

The rate of interest earned on the National Savings Certificate (NSC) is compounded every year, generating higher returns. Furthermore, it provides fixed returns over the investment tenure.

Is there any reinvestment option in NSC? up-arrow

Unfortunately, National Savings Certificate (NSC) does not allow reinvestment, so you cannot buy a fresh certificate each time you plan to invest in the NSC scheme.

How many RBI bonds can I opt for? up-arrow

The RBI Bonds are issued for at least ₹1000/ face value and there is no highest limit for investment in the Bonds.

Is it possible to sell RBI bonds? up-arrow

Yes, you can either purchase or sell the government bonds directly through the RBI Retail Direct (RRD) portal.