Table of Contents
ToggleIn India, you may choose from a wide range of investment products based on your financial goals and risk appetite. If you are looking for a safe, fixed-income investment option, the National Savings Certificate (NSC) can be a good choice.
It is a government-backed savings-cum-investment instrument that you can purchase from a post office. It is a suitable option if you want to diversify your investments by putting money in a low-risk product offering fixed returns. The scheme is presently offering an interest rate of 7.7% (as of 1st January 2024). You may use the NSC calculator online to determine how much profit you can expect from the scheme.
You could previously invest in NSC VIII (five-year tenure) and NSC IX (ten-year tenure). However, the latter is discontinued, and you can only subscribe to NSC VIII currently. Below is a list of its main features.
Now that your “what is NSC?” query is resolved, you might be wondering why you should invest in it. You should consider it because investing in NSCs has many advantages. Check out the below list to get a better idea about them.
You can invest in it by visiting an Indian Post Office. Here are the four steps to buy the certificate.
Two ways – Choose an Online Platform:
India Post Payments Bank: This is the official online platform for NSCs. You can access it through the India Post Payments Bank website or app.
Other Authorized Banks: Some banks also offer NSCs online. Check with your preferred bank for details.
Via India Post, you can open NSC online through Internet Banking available under General Services > Service request > New request option. Let’s go over this in detail:
More details can be found in their FAQs here.
You can invest in NSCs only if you meet the following criteria.
Remember that you are not eligible to buy NSCs on a Trust’s behalf or if you belong to a Hindu Undivided Family (HUF).
You need to submit the following documents to invest in NSCs.
The amount you invest in the NSC is tax-exemptible up to ₹1.50 lakhs annually under Section 80C of the Income Tax Act, 1961. The interest earned on the principal amount is tax-free for the first four years as it is reinvested in the product. The interest amount is also deductible under Section 80C, adhering to the limit of ₹1.50 lakhs. But, as the interest received in the fifth year is not reinvested, you must pay a tax on the income based on the tax bracket applicable to you.
You can opt for an NSC post office transfer without losing the accumulated savings. To do so, you need to collect Form NC-32, fill it as required, and submit it to the post office that issued your NSC.
You may also transfer the certificate to someone else by submitting Form NC-34 to the original post office. But you can transfer the NSC to another person only one time during the five-year investment tenure.
The National Savings Certificate rate of interest allows your money to grow over five years. Although the scheme does not allow you to withdraw the funds before maturity in usual circumstances, a premature withdrawal is possible in the following situations.
Investing in NSCs offers many benefits and practically has no risk as it is backed by the government. Therefore, it is advisable to consider this product for a balanced investment portfolio.
Yes, the NSCs are available at varied prices, the lowest of which is ₹1000. Moreover, it does not have any maximum limit.
Yes, you can submit Form 3 to change or cancel a nominee. However, the procedure requires you to pay a fee of ₹5.
Yes, a certificate holder can use it as collateral while availing of a loan. Most lenders like banks, government organizations, and NBFCs accept NSCs as security.
Powerd by Issued by