National Savings Certificate is commonly known as NSC. This is also a kind of Post Office Saving Scheme.
NSC is a Saving Bond of Indian Government, and there is a very popular scheme in terms of tax evasion. Whenever you invest in NSC, you get a certificate from the Post Office Department, which contains the details of the investment made by you.
Types of NSC
There are two types of NSC certificates available in the Post Office.
NSC Issue VIII
NSC Issue VIII Scheme is specially designed for those who are Government Employees, a Business Man, a Person of the Salary Classes, who are Income Tax Assesses, or a person who wants to take tax benefits by investing in Safe Instruments.
Apart from HUF and Trusts in NSC VIII certificate, anybody can invest. Range of NSC VIII certificate ranges between Rs 100 and Rs 10,000. But the Interest Rate of the NSC VIII Type Certificate is slightly lower than the NSC IX Type Certificate's Interest Rate.
You can invest as much amount as you want in this scheme because there is no limit of Amount to be invested in this scheme. However, the Tax Rebate can only be taken up to Rs. 1,50,000 / - Amount.
Minimum Maturity Period of NSC VIII Certificate is 5 years. That is, if you invest in this scheme, you can not withdraw your Invested Amount 5 years ago.
NSC Issue IX
Issue of NSC Issue IX has been stopped from December 20, 2015. The Range of this type of certificate was also from Rs. 100 to Rs. 10,000.
NSC IX Certificate's Interest Rate was slightly higher than NSC VIII's Certificate's Interest Rate. The maturity period of such a certificate could be up to 10 years.
Since now Government has stopped issuing NSC IX Certificate, Issue, so in this post we will only discuss about NSC VIII Issue.
Features of National Savings Certificate (NSC)
- In each of the NSCs, the Compound Interest is given.
- Interest comes to you only when your NSC investment becomes mature.
- Interest received every 6 months again gets reinvested in the same NSC scheme, resulting in the interest received, compounded.
- Even if the minimum amount is Rs 100, you can invest in NSC and buy it. While there is no limit of Maximum Amount to invest in it. So in this scheme, you can invest as much as you like from 100 rupees to Unlimited.
- Liquidity is low in NSC scheme. That is, if you have invested in NSC for 5 years, then you have to keep the NSC for that number and you will not have any regular income in it.
- Investment in National Savings Certificate is considered Safe and Secure just like Fixed Deposits.
- Who can invest in the NSC scheme, it has a limit but there is no limit to how much a person can invest in a person.
- This scheme is for Individuals. Therefore, companies like People of People, Trusts and Hindu Undivided Family are not eligible to invest in this.
- The investment made in the NSC scheme can not be withdrawn before its maturity.
- Nomination facility is provided in both NSC VIII and NSC IX.
- It is a Risk Free Investment like FD.
Benefits of National Savings Certificate (NSC)
- Since this is a government scheme, there is no risk of non-payment in this scheme. That is, whatever you have invested, you will definitely get all the amounts including interest, which is the responsibility of the government itself.
- You can invest as much amount as you want in this scheme. It does not have any Maximum Amount Limit of any kind.
- No tax on any of the Deducted At Source Charges is done on the total Amount received on Maturity, as is done on Bank FDs or Bank RDs.
- By placing this certificate in the form of collateral security you can take loans from banks as well.
- A Single Holder Type NSC Certificate can be bought by an Adult Person for himself or on behalf of a minor person.
- You can get Rebate under Section 80C of the Income Tax Act, 1961 for whatever you deposit in this scheme.
- If the certificate is lost or any kind of damage is done then the arrangement of duplicate certificate can also be done.
- Whatever interest you earn on the certificate, it is compounded in your Initial Investment and by Rebirth is done in the form by default, without which even without Extra Certificate Purchase it becomes your NSC Investment Increase.
- The interest rate charged at the time you submit the NSC certificate as a security, against which loan you take, is less than the interest rate charged on the interest rate, the personal loan.
- The interest rate you receive on an investment made in the NSC is higher than the Fixed Deposit interest rate.
- Whatever interest you receive in this scheme is taxable but it does not get you in cash but it gets reinvested from the back, so you can discount the interest under Section 80C of the Income Tax Act, 1961 which accrue It's done, but you have not yet received it.
- For those who want to invest in their fund, Safe and Secure Scheme, this NSC Scheme is a better scheme for them.
- You can also invest Rs 1,50,000 in the NSC and take tax deductions under Section 80C of the Income Tax Act, 1961.
Holders of National Savings Certificate
- Non-Resident of India - If a person is Indian but does not live in India, then he is not Eligible to invest in NSC Purchase. However, if a person has invested in NSC and has become an NRI then he can claim for all the benefits he receives in the NSC and after converting NSC, he can convert it into cash.
- Can not invest in this scheme by purchasing Trusts and HUF - Trust and HUF, NSC VIII Certificate. However, Karta of HUF could purchase NSC VIII certificate for HUF but not for its own.
Important things related to NSC
- One advantage in NSC is that when you invest Amount for 5 years or 10 years in the NSC, and during that period, if the interest rate decreases or increases, then on any investment made by you in NSC Does not affect Rather you get interest from the same rate on which the date you invested in Purchase NSC and invested in it. The effect of this new interest rate is on the new investors, who after investing in that new interest rate, invest and invest in NSC Purchase.
- On maturity, you can convert the certificate to cash at the same post office from where it has been issued. However, if the investor provides adequate proof to the officer of any other post office that he is entitled to receive this income, then the certificate can be converted to cash at any Post Office.
- For those who want to earn regular income, investing in the NSC scheme is not suitable, rather they should invest in the Post Office's Monthly Income Scheme.
Keep an eye on a particular point that if your dreams are big and you want to fulfill your dreams as soon as possible, then you should not invest in such safe and secure schemes because investing in these schemes will help you with the interest rate It's very rare to get it. It is almost impossible to complete your big and costly dreams.
So, if you really want to realize your dream, first of all, keep your budget in mind, by keeping your income and expenses in mind, reduce your expenses, save more and more, and then saving that to Mutual Funds, Equity Funds, Debt Invest in an Instrument like Funds because the rate of return you get from here will be much higher than the interest rate offered at the Fixed Deposit or Post Office schemes.
If you invest in the right place then your dreams can be fulfilled. About this, our Financial Financial Goals are available in the right investment, in a very elaborate manner.
Post Offices are mostly for those elderly and retired person who can no longer take risks and want to earn some income annually or monthly so that they can live their lives.
But those people who have just started earning their lives, instead of earning a little interest by investing in such a safe and secure place, they should earn more returns by investing in the Risky place.
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