NSC – National Savings Certificate – Eligibility, Interest Rate & Tax Saving Benefits

With any post office, you can open a National Savings Certificate (NSC). This is a type of investment that pays you a set amount of money for a set amount of time. The scheme is a project of the Indian government. People who sign up for a savings bond like this one can save money on income taxes by investing and not having to pay it back.

Like the Public Provident Fund and the Post Office FDs, this scheme is a low-risk, fixed-income product that pays out a steady amount of money. In your name, for a minor, or with another adult, you can buy it from the post office. Five years after you buy NSC, it has to be paid off. You can buy as many NSCs as you want, but only investments of up to Rs.1.5 lakh can be tax-free under Section 80C of the Income Tax Act. The certificates pay a fixed rate of interest, which is now 6.8% per year. The government changes the interest rate often.

NSC Key Information

Interest Rate

6.8% Per Annum

Minimum Investment

RS. 1,000/-

Lock-In Period

5 Years

Risk Profile

Low-Risk

Tax Benefit

Up To Rs 1.5lacs Under section 80C

 

Who Should Invest in NSC?

Anyone who is looking for a safe way to make money while not having to pay a lot of taxes can invest in NSCs. All of your money is safe with the National Savings and Loan. As with most fixed income schemes, they can’t keep up with the rate of inflation like tax-saving mutual funds and the National Pension System. The government has made it easy for people who want to invest in NSC by making it available at post office branches across the country.

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The government has pushed the National Savings Certificate as a way for people to save money. Because Hindu Undivided Families (HUFs) and trusts can’t invest in it, that means they can’t do that, too. Non-resident Indians (NRI) can’t buy NSC certificates, either. The scheme is only open to Indian citizens who live in the country.

Features and Benefits of the NSC

       Fixed income: Right now, the scheme is paying investors 6.8% of their money back. The returns on NSCs have been higher than on FDs in the past.

       Types: The scheme used to have two types of certificates – NSC VIII Issue and NSC IX Issue. It now only has one. December 2015: The government stopped issuing NSC IX in December of that year. Since the NSC VIII Issue is still open for subscription, that’s the only one.

       Tax-Saver: This person will be able Income Tax Act, 1961, Section 80C: As part of a government-backed scheme, you can claim up to Rs 1.5 lakh under this section.

       Start Small: When it’s possible, you can start with just Rs 1,000 (or multiples of Rs 100) as an initial investment. You can then increase the amount when it’s possible.

       Interest rate: At the moment, the rate of interest is 6.8% p.a., which the government changes every three months. It will be paid at maturity. It will be compounded every year.

This was in brief about NSC. To know more about Taxable Income, click here.

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