Invest Securely with National Savings Certificates (NSC)

Invest Securely with National Savings Certificates (NSC)

The National Savings Certificate (NSC) is a government-backed investment program offered by India Post. It caters primarily to small and mid-income investors seeking a safe and reliable way to grow their money while potentially reducing their tax burden.

NSCs function similarly to savings bonds. They offer a fixed interest rate for a predetermined maturity period, which is currently five years. The Indian government revises these rates quarterly, ensuring a steady income stream for investors.

Key Features and Benefits

• Guaranteed Returns: The government backs them, ensuring investors receive their principal amount and predetermined interest upon maturity.
• Tax Savings: Investments in NSCs qualify for tax deductions under Section 80C of the Income Tax Act, up to a maximum of Rs. 1.5 lakh annually.
• Flexible Investment: The minimum investment amount is just Rs. 100, with no upper limit. This allows individuals to start small and gradually increase their investment as their financial situation improves.
• Accessibility: NSCs can be easily purchased at any post office branch across India. The application process is straightforward, requiring minimal documentation.
• Loan Collateral: NSC certificates can be used as security when applying for loans from banks and NBFCs.

• Power of Compounding: Interest accrued on NSCs is compounded annually, implying that it is computed not only on the principal amount but also on the accrued interest from preceding years.

• Nomination Facility: Investors can nominate a beneficiary who will inherit the NSC in case of their unfortunate demise.
• Maturity Benefits: Upon maturity, investors receive the entire invested amount along with the accrued interest. There is no TDS on NSC payouts. However, investors are responsible for paying taxes on the earned interest during their income tax filing.
• Premature Encashment: Generally, early withdrawal from NSCs is not permitted except in specific situations such as the investor's death, a court order, or loan forfeiture by a government official.

Who Should Consider NSCs?

·       Risk-averse investors seeking a secure way to grow their savings.

·       Individuals planning for specific future goals like a child's education or a down payment on a house.

·       Additionally, the tax benefits make them particularly attractive for those in higher tax brackets.

Eligibility for Investment

• Indian Citizenship: Only Indian citizens can invest in NSCs. Non-resident Indians (NRIs) are not eligible.
• Individual Investors: Investment is restricted to individual citizens. Hindu Undivided Families (HUFs), trusts, and companies cannot participate in this scheme.
• No Age Limit: There is no minimum or maximum age limit for investing in NSCs.

Required Documents

• Completed NSC application form
• Original and photocopy of valid ID proof
• One recent photograph
• Address proof

Investing in NSCs

There are two ways to invest in NSCs:

Offline Investment Process

1. Obtain the Application Form: Either online or at any post office.
2. Complete the Form: Fill out the form accurately.
3. Submit Documents: Submit the completed form along with self-attested copies of required KYC documents.
4. Payment and Receipt

Online Investment Process

1. Department of Posts (DOP) Net Banking: Log in to your DOP net banking account.
2. Navigate to Services: Under "General Services," select "Service Requests."
3. Choose NSC Account Option: Click on "New Requests" and choose "NSC Account - Open an NSC Account (For NSC)."
4. Enter Details: Enter the desired investment amount and select the debit account linked to your PO savings account.
5. Review Terms and Conditions: Read and accept the terms and conditions.
6. Submit and Download Receipt: Enter your transaction password and submit the application. You can then view and download the deposit receipt.
7. Account Details: Log in to your account and view the details of your newly opened NSC account.