National Saving Certificate is an investment option by which an individual can invest his disposable income with a purpose to attain development for his saving and also tempt people to have a habit of saving. It is deliberate attempt by government to raise funds required by government for its projects, through which one can indirectly contribute to the development of their own country. It is a economical and secured investment instrument for public.
Who can subscribe NSC?
It has been designed for any businessman, government employee or any salaried people who income are assessed to tax from the point of view of Income Tax Act. The two most basic requirements are Indian residency and the assessee should either an individual or a trust, so Non-resident, HUF or companies or societies are not eligible for purchase of NSC.
Where to apply for NSC?
Any post-office who are registered or approved by Government agency are authoritative to release NSC certificates, so anyone can purchase an redeemed NSC at any time when he is willing to have NSC certificate.
How to apply NSC?
You have to fill application form and make payment to post-office directly or authorised agent. The payment can be made in cash or by cheque/pay order/demand draft or by presenting a withdrawal form alongwith the pass book of a post-office saving bank account or by surrender of a matured old certificate. The online payment option is also available, if NSC purchased from post office working on CBS platform.
Subscription of NSC
W.e.f 1-7-2016, NSCs VIII issue may be issued for any amount above Rs.100 and in multiples of Rs.100. One transaction of an investor on a day shall result in one certificate in e-mode or one entry in passbook. Earlier, NSCs were issued in the denomination of Rs.100, Rs.500, Rs.1000, Rs.5000 and Rs.10,000.
NSC Interest Rate
The rate of interest is 8.0% (w.e.f 1-10-2016 to 31-03-2017 vide O.M. No. 1/4/2016 NS.II dt. 29-9-2016 and 30-12-2016)
|Financial Year||Interest Rate|
|On certificates issued during F.Ys. 2013-14 to 2015-16||8.5%|
|On certificates issued during F.Y.2012-13||8.6%|
|On certificates during 1.12.2011 to 31.3.2012||8.4%|
|On certificates issued upto 30.11.2011||8%|
On certificates issued w.e.f 1.4.2016, interest shall be compounded yearly.
On certificates issued upto 31.3.2016 interest shall be compounded half-yearly.
NSC provides its various facilities of nomination to its owners. One of the facilities that an owner gets is that, he can transfer his NSC certificate from one person to another. Under certain specified conditions, with the transfer of certificate ownership is also transferred. Even transfer from one branch to another is possible.
You must note that the Supreme court has held that if a person holding a national saving certification (NSC) or an insurance policy dies, his legal heirs would have the sole right over the money on maturity rather than the nominee mentioned in the the certificate.
The maturity period for NSC was 6 years but due to revision recently the period is now 5 years for NSC VIII issue. For general understanding, if the value of certificate is Rs. 100 then on its maturity the compounded amount which one gets is Rs. 160.10. The maturity amount can even be re-invested. Maturity value of any other value is charged under proportionate rate.
The amount payable on maturity for a certificate of Rs.100 denomination (proportionately for other certificates) shall be –
|For certificated issued up to||Amount|
|1-12-2011 to 31-3-2012||150.90|
|1-4-2013 to 31-3-2016||151.62|
|1-4-2016 to 30-09-2016||147.61|
|1-10-2016 to 31-03-2017||146.93|
Loan on NSC
Amount of loan is depends on the bank from which you are going to apply. Once you have a NSC certificate you can come within reach of any nearest scheduled bank or any cooperative bank for loan. It is better to approach for any known bank from where you have a close relation because each and every bank has its own banking rules. To obtain loan or overdraft through this certificate is simple and flexible and it is neither expensive nor a complicated process compared to any other unsecured loan has like credit loans or credit cards used to have.
NSCs Income Tax Benefits
Amount invested in NSC-VIII issue alongwith PPF/LIC/ULIP etc. up to a maximum of Rs. 1,50,000 is eligible for deduction u/s 80C. Interest accrued during the year (except for the last year) shall be deemed to be reinvested and shall also qualify for deduction u/s 80C.
So being a government oriented instrument you have the security that the money will not die and would be used for good purpose with the fact that you get good return. So choose your NSC certificate with ingenuity and practically.