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.