National Savings Certificate
The Small Savings Scheme of the Post Office National Savings Certificate i.e. NSC is a better option for those investors who want to secure their savings as well as the benefit of tax on it. Previously NSC was available in maturity period of 5 years and 10 years, but after this, it has been made a scheme of 5 years maturity. You can also invest in this scheme by purchasing a certificate of 100 rupees. There is no maximum investment limit. In the current quarter, the scheme is getting 6.8 percent annual returns.
5 investment options
The National Savings Certificate is currently available in the denomination of Rs 100, Rs 500, Rs 1000, Rs 5000 and Rs 10,000. Any number of certificates of different value can be invested in NSC. It requires a minimum investment of Rs 100. There is no maximum investment limit.
NSC: Investment Benefits
Suppose if we invest the initial Rs 15 lakhs here… ..
Deposit in NSC: Rs 15 lakhs
Amount after 5 years: 20.85 lakh rupees
Your investment in this will be 15 lakhs, but in the form of interest there will be a benefit of about 6 lakh rupees. NSC maturity is 5 years. If you extend it 5 more times for 5-5 years, then an investment of 15 lakhs will make you a millionaire in 30 years.
Key features of National Savings Certificate
- NSCs with a maturity of 5 years can be purchased from any Indian post office.
- Its interest rate varies from time to time as per the guidelines issued from the Finance Ministry.
- The minimum investment amount in NSC is 100 rupees, but there is no maximum limit.
- Under Section 80C of the Income Tax Act 1961, under the NSC, tax deduction benefits are available for investments up to Rs 1.5 lakh per annum.
- Interest is deposited annually but payment is made only at maturity, in which TDS is not deducted.
- NSC is accepted as collateral or security for loans by all banks and NBFC.
- An investor can nominate any member of his family.
Single Holder Type Certificate: Under this, a person can buy a certificate in the name of himself or a minor.
Joint A Type Certificate: In this, two investors can buy an NSC together and both get an equal amount on maturity.
Joint B Type Certificate: Two people buy it together, but only one holder out of both gets the amount received at maturity.
Who can invest in National Savings Certificate?
All Indian residents can invest in NSC. Non-Indian citizens (NRIs) cannot purchase NSCs. However, if a resident Indian has purchased an NSC and becomes an NRI before maturity, then he gets the benefit. Trust and Hindu Undivided Family (HUF) cannot invest in NSC. HUF Karta can invest in NSC only in their name.
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