National Savings Certificate – NSC

Introduction: National Savings Certificates (NSC) as the name implies are certificates that  eligible members can buy for investment and tax saving purpose. It is part of the postal savings system of Indian Postal Service (India Post). The main objective of investing in the NSC is to get tax deduction on deposits and guaranteed returns on investment.

Eligibility: Any residential individual can purchase NSC. A minor can purchase the certificate through an adult (any person) or direct in his name

• Trusts, NRIs and HUFs cannot buy NSC. 

Denomination of Natonal Savings Certificate: The certificate will be available in the denominations of Rs. 100/, Rs. 500/-, Rs. 1000/-, Rs. 5000/- and Rs. 10,000/-. Any number of certificates for the denominations specified above may be purchased.

Minimum Investment: Rs 100/- (and multiples of Rs 100)

Maximum Investment: No Limit (But Tax benefit is applicable till Rs 1.5 Lakhs)

Maturity: 5 years. (Also know as VIII series – Earlier NSC with maturity of 10 years were also available but were discontinued later.)

Premature Encashment: Though Premature encashment before maturity is not available, however a certificate may be prematurely encashed in any of the following circumstances :
(a) On the death of holder or any of the holders in case of joint holders.
(b) On forfeiture by a pledgee being a Gazetted Government Officer.
(c) When ordered by a Court of Law.

Interest Rate: Click here to view the latest interest rate

Points to remember:

• A single holder type certificate can be purchased by, an adult for himself or on behalf of a minor or by a minor.
• Deposits qualify for tax rebate under Sec. 80C of IT Act.
• Interest gets compounded annually and reinvested by default.
• In case of NSC VIII , transfer of certificates from one person to another can be done only once from date of issue to date of maturity.
• Banks and NBFCs accept NSC as a collateral or security for secured loans.

 

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