Introduction-
National Savings Certificate-VIIIth issue (NSC) is fixed guaranteed income investment scheme. This can be purchased from any post office in India. The applicant can be Indian resident only. NSC can be purchased by any mode of payment either Cash/Cheque/Pay order/Demand Draft etc.
Who can purchase –
The Groups of people like trusts, companies or Hindu Unified Families are not eligible for investment in NSC, only an Individual resident not an NRI can purchase the same either-
- It can be purchased by, an adult for himself or on behalf of a minor or by a minor.
- It can be purchased with another adult as a joint account.
Type of NSC Holders
Single Holder: This Single Holder Certificate applies to an adult, or an adult on behalf of a minor. It enables the individual to hold the account to himself.
Joint ‘A’: This Joint ‘A’ certificate is applicable to two adult holders and will be paid to both when the scheme is matured. For transfer or cancellation or even for nomination, the signature of both the holders would be needed.
Joint ‘B’: The Joint ‘B’ certificate is the same as Joint ‘A’, but differs in the payment of maturity value. Hence, the maturity value will be given to any one of the two account holders.
Amount of Investment-
You can invest the minimum amount of Rs. 100 and in multiples of Rs. 100/-, there is no maximum limit to invest in NSC.
Now the interest rate for the quarter 1st of 2023-24 is 7.70% per annum. the interest rate has reduced to 6.80% per annum w.e.f. 01.04.2020, earlier the interest rate has been increased to 8.00% w.e.f 01.10.2018, earlier it was 7.60% from 01.04.18 to 30.09.2018. The interest is compounded annually but payable at maturity. The interest earned thereon is fully taxable.
The maximum amount for deduction under section 80C is allowable up to Rs. 1, 50,000. The interest accrued on NSCs every year is also eligible within tax deduction limit of Rs. 1,50,000.
Loan collateral-
Banks and NBFCs accept NSC as a collateral or security for secured loans. To do this, the concerned post master should put a transfer stamp to the certificate and transfer it to the bank.
Maturity-
The Maturity period is of 5 years. Upon maturity, you will receive the entire maturity value. Since there is no TDS on NSC payouts.
Prematurity-
No premature payment can be received exceptionally on the death of investor or by ordered by a court of law.
Nomination-
Investor can nominate a family member (even a minor) so that they can inherit it in the unfortunate event of the investor’s demise. The nomination can be made at the time of purchase in Form 1 or before the maturity in Form 2 or If the nomination needs to be changed use Form 3.
Duplicate NSC in case of Loss-
In case of certificate is lost/stolen/destroyed the owner of such certificate can apply for issuance of a duplicate certificate to the post master at such post office from where it has purchased on prescribed form with a small amount of charges. Once a duplicate certificate is issued, it will be redeemable only at the post office where it was issued.