Investment Plans 217 views September 29, 2020

National Saving Certificate

Most of the individuals want to multiply their wealth but due to market risks, they hesitate while investing. They want to take low risks and higher returns. So, here is an investment option for you that will help you multiply your money and you can also enjoy tax rebates while calculating your annual income. This investment is known as National Saving Certificate and it is available at your nearest post office. This plan is an initiative by the government that helps the individuals to make a risk-free investment. So, you must first understand the meaning of this certificate and see how it will help you to grow your wealth at low risk.

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Meaning of the National Saving Certificate

The NSC is a fixed income investment and you can get it from any post office nearby. This plan is introduced by the government of India that helps the middle-class income groups to accumulate and multiply their funds and enjoy tax rebates as well. You can buy this investment plan even for a minor but an adult should have a joint account with the minor. There is no maximum limit for making an investment in the National Saving Certificate. In order to enjoy tax deductions under section 80C, you will have to make a minimum investment of Rs.1.5 Lacs.

Terms and Conditions

  1. It is a regular income plan and safe for investment.
  2. This plan offers a guaranteed return to the investor.
  3. The risk in this investment plan is low.
  4. This plan is only introduced for individuals by the government.
  5. Hindu Undivided Family is not eligible to take this plan.
  6. This plan is also not available for Trusts.
  7. Non-Resident Indians are also not allowed to take the NSC Certificates.
  8. Withdrawals before the maturity is not allowed in this investment unless the investor dies or the court orders.

Benefits of National Saving Certificate

There are some exciting benefits of NSC that you must explore before investing. These benefits are unique from other investment plans.

Fixed Income

You can enjoy a regular income after the maturity of this investment. The maturity amount will help you to manage the future expenses and you will get guaranteed returns.

Tax Deductions

If your investment in the National Saving Certificate is Rs.1.5 Lacs or more then you can claim tax deductions under Section 80C of the Income-tax Act. This plan will give you rebates on your taxes that you will have to pay on your annual income.

Small Investment

The investment in NSC starts from Rs.1000 and you can increase the amount as per your needs. Therefore this plan is best for the middle income and low-income groups. You can increase your investment in the multiples of 100 as per your feasibility.

High-Interest Rate

National Savings Certificate offers you an interest rate of 6.68% and it might change as per the government norms. This rate of interest is revised by the government every quarter and gets compounded annually but payable at maturity.

Easy to Buy

You can but a National Saving Certificate from any Post Office present at your location. On the other `hand, you can transfer your certificate from one post office to another if it is needed. KYC process needs to be fulfilled if you are investing in NSC.

Loan Against NSC

If you want to take a loan against NSC then you can mortgage it with the banks and NBFCs. You are allowed to take secured loans against NSC and the concerned postmaster should put a transfer stamp on the certificate and transfer it to the bank.

Nomination

You are allowed to nominate a member of your family in this plan that will be entitled to receive the maturity amount in case of the unfortunate death of the investor. You can even nominate a minor in NSC.

Details of National Saving Certificate

ParticularsDetails
Minimum InvestmentRs.1000
Minimum Investment for Tax RebateRs.1.5 Lacs
Fixed Lock-in Period5 Years
RiskLow Risk
Tax DeductionsUnder Section 80C
Interest on Investment (Decided by the Government and might Change)6.68%
Types of NSC· NSC VIII Issue
· NSC IX Issue

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