Savings schemes help to cultivate investments & savings to achieve various milestones of life like retirement, children. ‘s higher education, &childrenâs marriage. The Money Saving Schemes help an individual achieve their financial objectives & meet unforeseen events over a specific period of time. Some of the examples are PPF, EPF, NSC, Kisan Vikas Patra, Sukanya Samriddhi Yojana, Atal Pension Yojana, Recurring Deposits, Fixed Deposits, Post Office Savings Scheme, & many more. In this article, we will be discussing the National Savings Certificate. Before that, let us know some key considerations to be kept in mind before investing in a National Savings Certificate.
Things to be kept in Mind before Investing in NSC
Provided are the things one should keep in mind while investing in NSC:
- No Premature Withdrawal
The amount invested cannot be withdrawn before the 5-year maturity period except for a court order or an investorâs death.
- Impact of Inflation
The interest rate offered on NSC might not be in pace with inflation.
- Taxable Maturity AmountÂ
One should keep in mind that though tax deductions can be availed on the interest earned that gets reinvested automatically, the maturity amount will be taxable.
Features & Benefits of National Savings Certificate (NSC)
Provided are the features & benefits of the National Savings Scheme:
- Types
There are two types of NSC certificates, namely Type VIII & Type IX; at the moment, only Type IX is open for subscription.
- Fixed Income
This scheme provides a guaranteed return of 7.7%, which is usually considered to be higher than fixed deposits.
- Tax Saving
As NSC is a government-backed scheme, one can claim a maximum of INR 1,50,000 u/s 80C of the Income Tax Act, 1961.
- Interest Rate
At present, the interest rate for quarter 2 of the financial year 2024-2024 is 7.7% per annum, which is revised quarterly.Â
- Smart Small
The minimum amount of deposit is INR 1000 initially, which can be increased later on.
- Access
This scheme can be bought from any post office once the documents are submitted & KYC has been completed.
- Maturity Period
The maturity period for the NSC is 5 years.
- Power of Compounding
The interest earned is compounded & re-invested on its own. To know the maturity amount, you can also use a Savings Calculator.
- Collateral
It can also be accepted as collateral by banks or NBFCs to get secured loans.
- Nomination
The investor must choose a nominee from his family members to inherit the amount in case of any unforeseen circumstances.
- Premature Withdrawal
No early exit from the scheme is allowed. However, it may be accepted in some exceptional cases, such as a court order or an investorâs death.
- Corpus after Maturity
The corpus amount would be received upon maturity. As NSC does not attract any TDS on payouts, the subscriber should pay the tax.
Eligibility Criteria
Provided are the eligibility parameters that are to be met to invest in NSC:
- Only Indian residents can buy NSCs.
- NSCs are not allowed to be purchased by Non-Resident Individuals.
- It is meant for individuals only & not for Hindu undivided families, companies, trusts, etc.Â
- There are no age-related restrictions on buying an NSC.
How to Invest in NSC?
There are two methods to invest in NSC, i.e. online & offline mode:
- Offline Mode
Step 1:Collect the hard copy of the NSC application form from the post office.
Step 2:Fill out the form with the required details & submit the same.
Step 3:The form should be submitted along with self-attested copies of the KYC documents required.Â
Step 4:The original documents are also required to be provided for verification purposes.
Step 5:Proceed to make payment of the amount to be invested.
Step 6: You can collect the National Savings Certificate once approved.
- Online Mode
Step 1:Open the Department of Posts via internet banking.
Step 2:After logging in, select âService Requestâ under the tab âGeneral Servicesâ.
Step 3:Under the tab âNew Requestsâ> âNSC Accountâ, select the option âOpen an NSC accountâ.
Step 4:Mention the amount to be deposited & then choose the account to be linked to the Post office savings account.
Step 5:Tick on âAccept the Terms & Conditionsâ to proceed further.
`Step 6:The transaction password should be entered, & then click âSubmitâ.
 Step 7:You can now view the deposit receipt & download it.
 Step 8:After logging in,click the âAccountsâ tab to view the NSC account details.
Documents Required
Provided below is the list of documents required to be submitted along with the application form:
- NSC Application Form
- Passport sized photograph
- Identification Proof such as a passport, voter ID, any government ID, driving license, PAN card, etc.
- Address proof, such as passport, telephone bill, electricity bill, bank statement, etc.
Steps to Request a Duplicate NSC?
Provided are the steps to be followed to request a duplicate National Savings Certificate:
Step 1: Fill out Form NC-29, available at any post office in India, to apply for a duplicate copy of NSC certificates.
Step 2: Submit the form at any of the nearest post offices; if the nearest branch is not the home branch, the application will be sent to the home branch by the new branch itself.
Step 3: It would contain details, such as the account number, amount, issuance date, &reasons to get a duplicate copy.
Step 4: There is no requirement for an indemnity bond if the certificates get damaged.
Step 5: In order to get a passbook form of certificate, you will be charged a small fee.
Conclusion
A National Savings Certificate is considered to be a safe & secure investment option, which offers a guaranteed return along with taxation benefits. This investment option best suits an individual who prioritises tax benefits & security to be a priority. It is a simple, reliable& easy-to-access process for investors that helps to grow savings.
