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| National Savings Certificate (NSC) |
Features
- Investment in NSC can be made in Post offices.
- Tenure of investment is six year from date of purchase of the certificates
- NSC are issued in denomination of Rs 100, Rs 500, Rs 1000, Rs 5000 and Rs 10000.
- Face value and maturity value mentioned in each certificate
- Minimum investment allowed is Rs 100, there is no maximum limit
- Can be held singly or jointly
- Nomination facility available
- Transferable to various post offices
Advantages/Disadvantages - Safety: Safe investment as NSC are issued by Govt of India
- Liquidity: No premature encashment allowed Can be pledged to obtain loans from banks
- Capital Appreciation: No capital appreciation. At maturity, the total of principal and cumulative interest are paid to the holder.
- Returns : Preset rate of interest 8%, so Rs 10000 become Rs 16010 at the end of six year. Interest compounded every six month, however, the rate of interest will not change through out the investment period of six year. Maturity proceeds not drawn are eligible for saving account interest for a maximum of two years from date of maturity
- Tax benefits: Eligible for income tax deduction under section 80C. Interest accrued eligible for deduction under 80C. Accrued interest taxable. Exempt from wealth tax
Live Examples - Rs 1000 grows to Rs 1601 in six years, interest income of Rs 601 is taxable for income tax
- Use online calculator to calculate returns from NSC
Documents and other requirements - Prescribed application and forms are available in post offices
- Application for purchase of NSC
- Application for cancellation/change of nomination
- Application for issue of duplicate certificate
Problems and Solutions - Death without nominee- heirship certifcate is required for the legal heir.
- Lost, stolen, destroyed, etc- Duplicate certificate can be issued for lost, tolen, destroyed, mutilated or defaced certificate.
Complaints - 1st recourse- Complaint can be lodged with the respective post offices from where the NSC have been purcahsed
- 2nd recourse- National Savings Institute (NSI) is an institute working under Union Ministry of Finance, Department of Economic Affairs, Govt of India which is entrusted with task of mobilizing small savings, providing to the ministry for redressal of information queries and grievances (http/nsiindia.gov.in)
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