National Saving Certificate

National Savings Certificates, popularly known as NSC, is an Indian Government Savings Bond, primarily used for small savings and income tax saving investments in India. It is part of the postal savings system of Indian Postal Service (India Post).

These can be purchased from any Post Office in India by an adult (either in his/her own name or on behalf of a minor), a minor, a trust, and two adults jointly. These are issued for five and ten year maturity and can be pledged to banks as collateral for availing loans. The holder gets the tax benefit under Section 80C of Income Tax Act, 1961.

Other similar government savings schemes in India include: Public Provident Fund (PPF), Post Office Fixed Deposit, Post Office Recurring Deposit, etc.

National Savings Certificates, or NSCs, are a type of Indian government savings bond that is mostly utilized for minor savings and income tax savings. It is a part of the Indian Postal Service's postal savings scheme (India Post). An adult (either in his or her own name or on behalf of a juvenile), a minor, a trust, and two adults jointly can purchase them from any Post Office in India. These are available in five and 10-year maturities and can be used as collateral to get loans from banks. Section 80C of the Income Tax Act of 1961 provides the bearer with a tax advantage. Public Provident Fund (PPF), Post Office Fixed Deposit, Post Office Recurring Deposit, and other similar government savings programmes exist in India. The following are some of the National Savings Certificate's most popular features and benefits.

Fixed-Rate of Income

From January 1, 2019, an individual will be able to get a guaranteed return of 8% yearly interest. They may relax knowing that they have a consistent and reliable source of income.

Types of National Savings Certificate

There were two variants of the National Savings Certificate at first. The NSC VIII Issue and the NSC IX Issue were the two. In December 2015, the government decided to end the NSC IX issue. As a result, only the NSC VIII Issue is now available for purchase.

A Tax Saver

Because the National Savings Certificate is a government-backed tax-saving plan, you may simply invest up to Rs 1.5 lakhs in it and claim the deductions under section 80C of the Income Tax Act, 1961.

A small start

As a starting point, one can invest as little as Rs. 100 (or multiples of Rs. 100) and subsequently raise the amount as funds allow.

Fixed Interest rate

From January 1, 2019, the current rate of interest on the National Savings Certificate is 8%. The rate of interest on the National Savings Certificate had previously been 7.6%. It's worth noting that the government adjusts the National Savings Certificate's interest rate every quarter.

Fixed Maturity period

The investor's current maturity time is for a duration of five years.

Easy Access

By presenting all of the necessary paperwork and fulfilling the KYC processes, anybody can acquire the National Savings Certificate plan from any of the neighbouring post offices. Transferring the National Savings Certificate from one post office to another is very convenient.

Availability of Loan collateral

The National Savings Certificate is accepted as collateral or security against secured loans by all major banks and NBFCs. To do so, the relevant postmaster must stamp the National Savings Certificate with a transfer stamp and transfer the National Savings Certificate to the bank's possession.

The Power of compounding

The National Savings Certificate's interest is compounded and automatically reinvested, but the earnings may not be enough to keep up with inflation.

Nomination facilities

An investor can name a member of his family (even a juvenile) to inherit his or her investment in the terrible case of the investor's death

Corpus post maturity

The person would get the entire maturity value at the moment of maturity. Because there is no TDS on National Savings Certificate distributions, the subscriber is responsible for paying the appropriate tax.

Early withdrawal

The National Savings Certificate cannot usually be withdrawn early. However, in extreme circumstances, such as the investor's death or court order, they accept the same.