National Savings Certificate

The national savings certificate is an initiative started by the Government of India. NSC is a fixed income investment scheme that can be opened with any post office. The target market for this scheme is small to middle-income investors who are provided an opportunity to save money while saving on income tax. This scheme is a secured scheme that has a very low risk in it just like the Public Provident Fund scheme.

For accessing this scheme, you can go to your nearest post office and invest in the scheme, for a minor, you can even jointly invest with some other adult. You can invest in this scheme for a tenure of 5 years or 10 years, depending on your preference. You can invest as much money as you wish to invest in this scheme. But, for getting relaxation on tax under section 80C, you must invest till up to a minimum of 1.5 lakhs. The NSC certificate provides you an opportunity to earn a high savings interest of 8% per annum.

Earlier, when the scheme was launched, the scheme had two types of certificates which are NSC VIII Issue and NSC IX Issue. However, later on in December 2015, the Government discontinued the NSC IX Issue which means only the NSC VIII Issue is only open for a subscription now.

Why should you invest in NSC?

You must invest in NSC for several reasons such as:

1. If you are looking for a safe investment opportunity while earning a good income, then it is a great investment. It also provides you with a fixed income at 8% annual interest.
2. NSC promises guaranteed interest, and your money is completely safe unaffected by market fluctuations. Of course, like other lucrative schemes such as mutual funds or national pension system, these schemes cannot give you results good enough to beat inflation, but your money is totally safe.
3. The scheme is readily accessible at all post offices across the nation.
4. The scheme has been started by the government for individuals to help them build a good financial corpus. Hence, this scheme cannot be availed by trusts or by Hindu Undivided Families (HUFs).
5. The scheme is valid for Indian citizens, and the NRIs cannot invest in this scheme.
6. You can invest as little as Rs. 100 in this scheme and can later scale it up as per the convenience.
7. The interest rate is revised every quarter, and the interest is compounded annually. The entire sum of money is paid only at the time of maturity of the scheme.
8. The scheme can be easily transferred from one PO to another. Moreover, you just need to submit your essential documents and are required to go through the KYC process to avail of the scheme.
9. A great advantage is that you can produce an NSC certificate at the banks or NBFCs to avail secured loans. The concerned postmaster needs to put a transfer stamp on your NSC, and it can be transferred to the bank as security.
10. You have the option of nominating any of your family members, including a minor to avail of the benefits of the scheme in case of any sudden unfortunate event such as the sudden demise of the investor.
11. On maturity, you get the entire principal along with the added interest. Of course, you need to pay the tax if it is applicable as there is no TDS deduction or NSC payouts.
12. This scheme does not encourage early exit. But, in exceptional cases like the investor’s death, the money can be withdrawn if the court has permitted to do so.

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