You want your investment to be safe. You have decided to invest your money in fixed income security. The money you invest remains safe and you get interest on this amount. You have chosen to invest your hard earned money in the national saving certificate, popularly called NSC.
The Government wants you to save your money and what better way than the NSC. Your money is safe. You also get interest, on the money you deposit under the NSC. The minimum amount you can invest in the NSC is INR 100. There is no upper limit on the amount you can invest in the NSC. You can purchase the NSC at the branches of the post office. You can transfer the NSC from one branch of a post office, to another branch of the post office. If you are an NRI, you cannot invest in the NSC.
If you are a Government employee, businessman or a salaried employee, you can invest in the NSC VIII Issue.
Minimum amount is INR 100. There is no upper limit for investing in the NSC VIII Issue.
The tenure of the NSC VIII Issue is 5 years.
Only individual investors and minors through their guardians, can invest in the NSC VIII Issue. NRI’s, HUF’s (Hindu Undivided Families) and Trusts cannot invest in the NSC VIII Issue.
There is no TDS (Tax deducted at source), if you invest in the NSC VIII Issue.
You get an interest of 8.5% a year, on the amount you invest in the NSC VIII Issue.
Minimum amount is INR 100. There is no upper limit for investing in the NSC IX Issue.
Only individual investors and minors through their guardians can invest in the NSC IX Issue. NRI’s, HUF’s (Hindu Undivided Families) and Trusts cannot invest in the NSC IX Issue.
You get an interest of 8.8% a year, on the amount you invest in the NSC IX Issue.
You can pledge the National Saving Certificate as collateral and avail a loan against it.
The money you invest in the National Saving Certificate, is tax deductible up to INR 1.5 Lakhs, under Section 80 C of the income tax act. The interest you earn from the NSC is taxable. However NSC is a cumulative scheme. The interest you earn, is deemed reinvested in the scheme. You get a tax deduction under Section 80 C of the income tax act on this interest, making it tax free. The final year’s interest is paid out to you when the NSC matures. This amount is taxed. On maturity of the NSC, both your principal and interest accumulated are paid back to you.
The 10 year National Savings Certificate which had a term of 10 years, has been stopped. The Ministry of Finance and the Postal Department have stopped issuing the 10 year National Savings Certificate, from 20th December 2015. The Government was forced to offer a higher rate of interest for a long term of 10 years, for investors in the 10 year National Savings Certificate. In a falling interest rate scenario, this would cause a loss to the Government.
If you are a risk averse investor (afraid to take risks), you must invest in the NSC, as it gives a higher interest rate than fixed deposits.
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