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National Savings Certificates

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What is a National Savings Certificates?

You can invest in the National Savings Certificate by walking into the nearest post office. It is a highly popular small savings scheme. The money you deposit is safe and you get interest on the money, you deposit in the National Savings Certificates.

How to apply

  • You can apply for the National Savings Certificates at the nearest post office.

  • You have to fill the application and submit it at the relevant counter. You will be issued a certificate.

  • You need to keep the certificate safe and submit it at the time of withdrawal.

  • You need to have identity and address proof as part of the KYC (Know Your Customer), procedure.

Why invest in National Savings Certificates

Invest with no Limit

You can invest in the National Savings Certificates, with no upper limit. This is also a safe investment to make.

 

High Interest

Gives a higher rate of interest than a fixed deposit. Also gives a high rate of interest, when compared to other fixed income securities.

Tax Benefits

You get a tax deduction on the amount you invest and the reinvested interest, subject to a particular limit. There is no TDS.

Ease of Purchase

You can purchase the National Savings Certificate in the name of your minor child. You can also make a joint purchase with spouse.

Eligibility for National Savings Certificates

You have to be a citizen of India to open a National Savings Certificates. NRI's and HUF cannot invest in the National Savings Certificate. You can open a National Savings Certificates alone (single account), or even as a joint account. The account can be opened in the name of a minor by parents or legal guardian.

Types of National Savings Certificates

5 Year National Savings Certificates

  • You have to invest a minimum of INR 100 in the 5 Year National Savings Certificates. You can invest in denominations of INR 100, 500, 1000, 5000 and even 10000. There is no upper limit for investing in the 5 Year National Savings Certificates.

  • The 5 Year National Savings Certificates has a lock in period of 5 years.

  • You get interest of 8.5% per year.

  • You get a tax deduction up to INR 1.5 Lakhs per year under Section 80 C of the income tax act. Your taxable salary is calculated after accounting for this deduction.

10 Year National Savings Certificates

  • You have to invest a minimum of INR 100 in the 10 Year National Savings Certificates. You can invest in denominations of INR 100, 500, 1000, 5000 and even 10000. There is no upper limit for investing in the 10 Year National Savings Certificates.

  • The 10 Year National Savings Certificates has a lock in period of 10 years.

  • You get interest of 8.8% per year.

  • You get a tax deduction up to INR 1.5 Lakhs per year under Section 80 C of the income tax act. Your taxable salary is calculated after accounting for this deduction.

 

Concepts & FAQ's National Savings Certificates

What is a National Savings Certificate?

National savings certificates are certificates issued by Department of post, Government of India and are available at all post office counters in the country. This scheme is specially designed for Government employees, self employed and other salaried classes.

It is a long term safe savings option for the investor. National Savings Certificates have a high interest rate at 8.6% compounded half yearly. Post maturity interest will be paid for a maximum period of 24 months at the rate applicable to individual savings account.

Concept of National Savings Certificates : NSCs are issued in denominations of Rs 100, Rs 500, Rs 1,000, Rs 5,000 and Rs 10,000 for a maturity period of 6 years. There is no prescribed upper limit on investment. Individuals, singly or jointly or on behalf of minors and trust can purchase a NSC by applying to the Post Office through a representative or an agent.

The certificates are easily transferable from one person to another through the post office. There is a nominal fee for registering the transfer. They can also be transferred from one post office to another. One can take a loan against the NSC by pledging it to the RBI or a scheduled bank or a co-operative society, a corporation or a government company, a housing finance company approved by the National Housing Bank etc with the permission of the concerned post master.

Tax Benefits : Tax benefits are available on amounts invested in NSC under section 88, and exemption can be claimed under section 80L for interest accrued on the NSC. 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. Investment up to Rs. 1, 00,000 per annum qualifies for IT Rebate under section 80C of IT Act.

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Frequently Asked Questions

Where can I purchase National Savings Certificates (NSC)?

NSCs can be purchased from all head post offices and authorized post offices.

Who is eligible for purchase of National Savings Certificates (NSC)?

Any adult individual can buy NSCs. NSCs can also be bought jointly or by an adult on behalf of a minor.

How do I purchase National Saving Certificates (NSC)?

You can apply for an NSC in a prescribed form at any post office, in person or through an authorized agent.

How can NSCs be encashed at maturity?

The certificate can be encashed at the post office registered or at any other post office if the concerned authority is satisfied with the identity proof of the individual presenting the certificate.

Is investment in National Savings Certificates (NSC) eligible for tax benefits?

Deposits up to Rs.1 Lakh qualify under Section 80C of the Income Tax Act.

How do I pay for National Saving Certificates (NSC)?

You can pay by cash, locally executed cheque, order, demand draft drawn in favor of postmaster etc

Is nomination facility available in NSC?

Yes, Nomination facility is available.

Can I Get Duplicate Certificate if my National Savings Certificate lost, stolen or destroyed?

Yes, You can get a duplicate NSC from the post-office if it is lost, stolen or destroyed. The Procedure will be much more easy if you have a XEROX Copy of the Original Certificate.

What are the advantages of National Savings Certificate?

National Saving Certificate is good for investment and is less risky as it is issued by government. The repayment is guaranteed by the Central Government. It gives interest at the rate of 8.6 per cent per annum. Tax benefits under section 80 C of Income Tax Act are applicable.

How can one know whether the NSC is matured or not?

You can approach the post office which issued the certificate.

What are the Advantages of National Savings Certificates?

 

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Wednesday, January 3, 2018, 4:26 PM

The government expects to roll out all 650 branches of India Post Payments Bank (IPPB) by April 2018, Parliament was informed today. Minister of State for Communication Manoj Sinha said IPPB has launched 2 pilot branches on January 30, 2017, at Raipur (Chhattisgarh) and Ranchi (Jharkhand) in 2016-17. However, no branch was rolled out in the current financial year, Sinha said.

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To ensure that it meets its budgeted collections under the small savings schemes, the government has allowed three private sector banks — ICICI Bank, HDFC Bank and Axis Bank — along with all the public sector banks to accept deposits under schemes like the National Savings Certificate (NSC), Kisan Vikash Patra (KVP) and Monthly Income Scheme (MIS), among others.
 
 

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Smart Savers: #5 National Savings Certificates

Thursday, April 6, 2017, 9:44 AM

National Savings Certificates is an Indian Government Savings Bond, primarily used for small savings and income tax saving investments in India. The maturity date for these certificates is set to 5 or 10 years from the date of purchase, but the interest is calculated on yearly basis. This interest will not be paid to the certificate holder till such time as the investment matures.

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It is a six-year savings scheme offered by designated post offices. It offers guaranteed monthly returns on deposits. The account can be opened singly or jointly, with a minimum investment of Rs 1,500. The maximum is capped at Rs 4.5 lakh if the account is held singly and at Rs 9 lakh, if jointly. One can open multiple accounts, but overall limits stay.

 

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