What is NSC scheme and its benefits & interest rates

National savings certificate NSC

NSC full form: National Savings Certificate .

NSC is a fixed income financing scheme that you can open at any post office. A Government of India project, it is a reserve funds security that energizes subscribers – principally for small to mid-pay investors to contribute while saving money on income tax. A fixed-salary instrument like PPF and Post Office FDs, this plan also is a safe and lesser risk product. NSC scheme right now offers an interest rate of 7.9%, equivalent to that of another popular small saving scheme like PPF.

You can get it from the closest post office in your name, for a minor or with another grown-up as a joint account. They come with 2 fixed maturity terms – 5 years and 10 years. There is no highest limit on the acquisition of NSCs, yet investments of up to INR 1.5 lakh can get you a tax break under Section 80C.

NSC Eligibility criteria

NSC eligibility

The acceptability criteria for financial specialists or investors to buy the NSC are stated below:

  • There is no age limit for people so as to buy a certificate.
  • The person or investor must be an Indian resident.
  • NSC purchasing can be made with another grown-up or people can purchase an NSC on behalf of a teenager.
  • Under NSC 8th Issue, HUFs and Trusts are not qualified to invest in the plan.
  • Non-occupant Indians can’t invest in NSC scheme.

Features & Highlights of NSC

The fundamental highlights of the plan are referenced beneath:

Features of NSC scheme
  • NSC Tax benefits are given.
  • Salary is fixed- you get ensured returns (8% yearly interest) and can appreciate a regular pay.
  • The interest rate is high.
  • Simple to access as the plan is accessible in post offices across India.
  • Compound interest: The interest you gain on your investment gets compounded and reinvested as a matter of course, however, the returns don’t beat rise.
  • Whole maturity worth will be received.
  • Little investments can be made.
  • The maturity time in the NSC scheme is of 5 years and 10 years.
  • NSC can be given as collateral or security for loans.
  • Untimely NSC withdrawal is permitted under specific conditions.

What are the documents required for the NSC scheme in the post office?

documents required for NSC scheme

list of document required for NSC:

  • Original ID proof – ( Passport, PAN card, A voter ID card, Driving license, A government ID card, A senior resident ID card)
  • Address Proof that includes (Visa or Passport, Telephone bill. Electricity bill, Bank Statement with Cheque, ID card issued by the Post office.
  • And the latest Photocopy or photograph.

What is the maturity period of the NSC scheme?

NSC accompanies two-term periods, one is of 5 years and another of 10 years. Investments in these declarations which go under the 8th issue mature after 5 years while those bought under the IX issue mature after a time of 10 years.

What to do if the NSC certificate is lost?

On the off chance that the Certificate is lost, robbed, damaged or destroyed, the legitimate owner of such certificate may apply for the duplicate certificate in the predetermined form (NC29) to the post office where the certificate is enlisted or to some other post office which will send the application to the post office from where the certificate has been given.

FAQs on NSC

⭐ Is NSC a good investment?

The National Savings Certificate is a one-time purchase. But, when you reach the limit under Section 80C (INR 1.50 lakh), the investments in NSC don’t fit for a tax deduction. So in the event that you have an ongoing PPF account, it is smarter to continue putting resources into it since it likewise offers extraordinary tax benefits.

⭐ Is NSC tax free?

The interest on NSC is taxable. But, as it is an aggregate plan (for example the interest isn’t given to the investor then also aggregates in the account), every year’s interest is deemed reinvested in the National Savings Certificate. Since it is considered reinvested, it meets all requirements for a new deduction under Section 80C, along these lines making it tax-free.

⭐ Can I buy NSC certificates online?

On the off chance that you have a Savings account with Bank/Post office, you can purchase NSC in e-mode or through online medium. You need to have access to web banking or e-Banking. In the event that you don’t have Savings account, you need to open a savings account and apply for online Banking before the acquisition of NSC.

⭐ Can we take loan on NSC?

There are two alternatives with respect to taking a loan on the security of NSCs — The first option is that you can take a flat loan on National Savings Certificate and pay in a month to month EMIs or you can get an overdraft fluency against the security of these. Usually, there are no prepayment fees on loans taken against NSC.

⭐ Is NSC transferable?

A large number of us don’t have the idea that transferring NSC from one individual to another is conceivable. The transferee must be qualified to purchase the National Savings Certificate as per rule. Additionally, the transfer is allowed for the entire amount yet not halfway. After transfer again it can be given to the initial holder.

You may also be interested to know about our article on How to save Income Tax

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