About National Savings Certificate
The National Savings Certificate is a fixed-income investment scheme that individuals can open with any post office branch. NSC scheme is a Government of India Initiative to supports subscribers (including small and mid-income investors) to have a savings bond and save on income tax.
Who Should Invest in National Savings Certificate?
NSC scheme is a guaranteed income investment scheme. Though NSC cannot give huge returns like other tax savings, it has complete capital protection. Currently, this savings scheme is for Indian citizens. So, Trusts, Hindu Undivided Families, Non-Resident Indians and Private and Public Limites Companies are allowed to invest in NSCs.
Where and How can an Individual buy National Savings Certificate?
- NSC certificates can be issued through Electronic mode or in Passbook mode.
To buy the certificate in e-mode, you need to have a savings account with Bank/Post office, given you need to have access to internet banking. An investor or minor with another adult can buy an NSC certificate.
- An Individual can purchase the certificate from a Public Sector Bank or Private Banks like Private, HDFC and Axis.
Documents required for National Savings Certificate
- NSC application form.
- Passport, Permanent Account Number (PAN) Card, Voter ID, Driving License, Senior Citizen ID, or Government ID for verification of Investors.
- Address Proof (Electricity Bill, Passport, Telephone Bill, Bank Statement)
Features and Benefits of National Savings Certificate
- Fixed Income: NSC scheme generates a guaranteed return at a rate of 6.8%.
- Tax Saver: An NSC holder can claim up to 1.5 lakh following the laws laid under Section 80C of the Income Tax Act, 1961.
- Interest Rate: Interest Rate is at 6.8% p.a., following revision by the Government of India every quarter.
- Maturity Period: 5 years. NSC is calculated annually but payable at maturity, i.e. after 5 years.
- Types of NSC: Previously, it had NSC VIII Issue and NSC IX Issue. The government then discontinued the NSC IX Issue at the end of the year 2015. Currently, only the NSC VIII Issue is open for subscription.
- Access: You can buy this scheme from any post office by submitting the required documents and undergoing the KYC verification process. You can choose to transfer the certificate from one post office branch to another (if needed).
- Loan collateral: For Secured Loans, Banks and NBFCs accept NSC as collateral or security. In order to use NSC as collateral, you can ask the concerned postmaster to put a transfer stamp on the certificate and transfer it to the concerned bank.
- Power of compounding: It is the interest a person earns on the investment which gets compounded and reinvested by default, though the returns are not that high.
- Nomination: A NSC holder can nominate a family member’s name (even a minor) to take charge of his certificate in the unfortunate event of the investor’s demise.
- Corpus after maturity: NSC gets matured after 5 years and the amounts are payable at maturity. After the maturity period, the NSC holder gets the full amount on conditions that he still has to pay the applicable tax on the value.
- Premature withdrawal: In case of any unfortunate incident like the death of the investor, then it is accepted to withdraw the investment prematurely.
National Savings Certificate – FAQs
✅ How can we buy an NSC online?
Currently, NSC cannot be subscribed online. Instead, an individual has to visit the nearest Post Office in order to fill out the NSC application form and submit it to the bank to open an account.
✅ In which section does NSC come under?
NSC come under Section 80C of the Income Tax Act, 1961.
✅ What is the process of opening an NSC account in the Post Office?
- Visit your nearest Post Office branch.
- Ask for an NSC application form and fill out the details.
- Submit all the necessary documents along with your signed form.
- Make the payments to open your NSC account in the form of cash, DD or cheque.
- Collect the acknowledgement slip from the post office after the completion of the process.