National Savings Certificate

National Savings Certificate (NSC)

What is National Savings Certificate?
National Savings Certificates (NSC) are certificates issued by Department of post, Government of India and are available at all post office counters in the country. It is a long term safe savings option for the investor. The scheme combines growth in money with reductions in tax liability as per the provisions of the Income Tax Act, 1961.

Duration: The NSCs have a maturity period of 6 years.

Mode of Investment: Single, Joint (Two or more), HUFs and Minor with parent/guardian and trust can purchase a NSC by applying to the Post Office through a representative or an agent.

Investments: Min Amt.  Rs.100/- and additional investment in multiples of Rs. 100/- Max Amount No Limit

Denominations   Rs. 100/-, 500/-, 1,000/-, 5,000/-, 10,000/-, 50,000/-

Returns: NSC provides an interest rate of 8% which is compounded half yearly. Post maturity interest will be paid for a maximum period of 24 months at the rate applicable to individual savings account. A Rs.1000 denomination certificate will increase to Rs. 1601 on completion of 6 years.

Advantages:

• Department of Posts (DOP) in association with NSDL has introduced the facility of holding NSC in dematerialized form
• Tax benefits are available on amounts invested in NSC under section 88.
• Exemption can be claimed under section 80L for interest accrued.
• Interest accrued for any year can be treated as fresh investment in NSC for that year and tax benefits can be claimed under section 88. 
• NSCs can be transferred from one person to another through the post office on the payment of a prescribed fee. They can also be transferred from one post office to another.
• The scheme has the backing of the Government of India so there are no risks associated with your investment.