Post Office National Savings Certificate

Post Office National Savings Certificate is a savings scheme with a fixed income and consists of a Lock-in period of 5 Years. NSC is risk free saving scheme backed by the government. It has tax exemption up to the deposit of 1.5 Lakhs under section 80C. Mainly NSC is for low to mid-level incomers.

This is a secured investment designed by the government of India and can be opened in any post office. Moreover, this is a very popular scheme in India, where only the residents of India can open this account. Any individuals or minors with the help of a guardian/parents can open an NSC account.

Further, Let us see in detail the eligibility, minimum, maximum investment, interest rate, tax exemption, premature withdrawal, nomination, and Loan for NSC in this article.

What is a Post Office National Saving Certificate?

The National Savings Certificate (NSC) is an investment scheme that can be opened in any Post office. It is a Fixed income investment.

1. Eligibility

• Indian Citizens are eligible.
• Whereas Non-resident Indians (NRI) and Hindu Union Families (HUF) cannot open NSC.
• Single or joint account holder, Minors above 10 years and Minors below 10 along with the guardians/parents can have this account.

2. Investment Option

• NSC is of two types: National Savings Certificates VIIIth Issue and National Savings Certificates IXth Issue.
• Moreover, National Savings Certificates VIIIth Issue is for the duration of 5 Years and National Savings Certificates IXth Issue is for the duration of 10 Years. Currently, this is not in use.

3. Minimum and Maximum investment:

• Minimum investment is Rs. 1000
• But, there is no maximum limit
• Also, the Post office allows any number of NSC accounts.

4. Interest rate

• The interest rate is 7.7% which is calculated annually.
• Also, during the time of maturity, the interest is paid back.
• Meanwhile, the government changes the interest rate for every quarter.

5. Tax exemption

• The tax exemption for the investment of up to Rs. 1.5 Lakhs under section 80C.
• Furthermore, as the interest is compounded annually and is re-invested into the deposit itself the tax exemption is provided for the first 4 years up to Rs. 1.5 Lakhs.
• In the 5th year of the matured NSC, the interest paid back is taxable.

6. Premature closure

• Generally, NSC cannot be withdrawn before 5 years.
• In some cases, such as death of the NSC holder, any court order, or forfeited by the gazette officer.

7. Loan

• NSC is taken as a collateral or guarantee for the loan by many banks.
• However, the postmaster needs to attest a stamp to transfer the NSC to the bank.

8. Transfer

• NSC transfers from one post office to another.
• Also, transfer from one person to another person is possible.
• Under certain conditions like the death of an NSC holder to the nominee, legal heir, or joint account holder, by pledging the account to another person, and also, by the court order.
• The new owner’s name will be indicated on the certificate.

9. Nomination

• Nominees can be legal heirs, partners, parents, or any family person.

10. Maturity

• Will get the interest with the deposit amount only after the 5 years.

Documents Required

• Photograph
• Address Proof such as EB bill, Passport, Aadhar Card, or Bank statement.
• Identity proof such as a Passport, PAN Card, Driving License, Aadhar card, Voter Card, Senior Citizen ID, or any government-approved identity card.

How to apply?

Post Office National Saving Certificate Offline:

• Visit the nearest Post Office.
• Firstly, get the form for the National Savings Certificate from Postmaster.
• Fill out the personal details and KYC details.
• Moreover, Submit along with the required documents.
• Finally, pay the deposit amount using the Cheque, cash, or demand draft.
• Get the National Savings Certificate either in e-mode or Passbook

Online:

• Visit the E-banking portal of the Post Office and Login using the credentials
• Firstly, Under General Service, click on the Service Request
• Then, select the New Request and choose the Open NSC account.
• Fill out the required details.
• Also, fill in the deposit amount and select your savings account.
• Lastly, Verify the terms and conditions, make the investment, and submit.
• Get the Deposit receipt and National Savings Certificate in e-mode

Post Office National Saving Certificate (NSC) is a risk-free investment with a fixed income and they will get the interest at maturity. Also, this is the safe and secured investment inaugurated by the Indian government.

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