Kolkata: For millions of Indians, returns in equity and equity-linked investment products hold little meaning since they simply don’t have the risk appetite to adopt such options. They would rather accept lower rates of return if the investment is completely safe and secure. This is precisely where the usefulness of the good old National Savings Certificate (NSC) comes in. The instrument was designed for small and medium investors and has successfully retains its appeal among a large number of Indians in this category.
The National Savings Certificate (NSC) was launched in May 8, 1989, by the Government of India and still retains its popularity among a huge number of Indians. Let’s have a look at its key features and how one can invest in it online. It is a secure investment option and one can buy it from post offices. An interest rate of 7.7% is currently paid on this instrument, though it comes up for revision once in every quarter.
Who is eligible to invest in NSC?
There are a few simple eligibility criteria for one to invest in NSC. These are:
- The investor must be an Indian citizen.
- He/she should be more than 10 years old.
- Individuals and Hindu Undivided Families (HUFs) can invest in this instrument but trusts cannot.
- Non-resident Indians (NRI) too cannot invest in NSC.
Investment limits of NSC and tax benefits
One has to invest a minimum amount of Rs 1,000 in an NSC. There is no maximum limit. NSC has a lock-in period of 5 years, before which it cannot be withdrawn. Moreover, if you are in the old tax regime, you can claim income tax deductions of up to Rs 1.5 lakh according to Section 80C of the Income Tax Act 1961.
cannot be withdrawn before the completion of 5 years.
You can invest in NSC from the nearest post office in your name, for a minor or with another adult as a joint account. NSC comes with a fixed maturity period of five years. There is no maximum limit on the purchase of NSCs.
Used as collateral to obtain loans
All banks and NBFCs accept NSC as collateral if one wants to pledge them for taking loans. Once the tenure ends, the entire amount is received as one-time payment. There is no tax deducted at source (TDS) on NSC payouts. The entire amount becomes taxable at the slab rate of the taxpayer.
How to invest NSC online
- Log in to Department of Posts through net banking
- Go to ‘General Services’ and then select ‘Service Requests’
- Click ‘New Requests’ and then choose ‘NSC Account – Open an NSC Account (For NSC)’
- Enter the amount to be deposited; choose the debit account linked to the post office savings account
- Select ‘Click Here’ to see terms and conditions and accept
- Enter the transaction password and click ‘Submit’
- A deposit receipt will appear; download it
- Login to click ‘Accounts’ and you can view the details of the NSC created
Millions of Indians still value the good, old NSC (National Savings Certificate) and not for no reason. High returns of the equity market and equity-linked investment instruments such as mutual funds are associated with turbulence which don’t fit the appetite of many investors. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
