National Savings Certificates (NSC) is another popular investment scheme in India. In fact one of the best investment option till few years back, as post office is the mostly available in farthest corner of India. So a scheme like NSC is really good to invest money and get guaranteed return. But as people are getting educated and banks are spreading their operations across India, schemes like National Savings Certificates (NSC) is losing their shine. Earlier post office has 2 version of NSC schemes, one for 5 years and another for 10 years. But now only the 5 year National Savings Certificates (NSC) is valid.
Key Highlights of National Savings Certificates (NSC) in Post Office
As I have mentioned, this is one of the best guaranteed return small savings scheme in post office. Here are the key features of this scheme. Right now only NSC issue VIII is valid, Govt has discontinued NSC issue IX.
- One can buy this scheme from post office only and the maturity period is for 5 years.
- The interest rate of National Savings Certificates (NSC) is 8%. The interest will accumulate annually and then again reinvested, means compounded annually.
- There is no TDS deducted on maturity amount and which is a very good sign to make this scheme popular among people who are happy to get low but guaranteed return.
- You can avail income tax benefit under section 80c, for the amount of National Savings Certificates (NSC) purchased from post office.
- One can open National Savings Certificates (NSC) in post office for self, on behalf of other or minor also. You can also get NSC certificate as joint holder.
- You can also avail loan against your National Savings Certificates (NSC) from Post office.
- Under Issue VIII of NSC Trusts and Hindu Unified Families are also not eligible to invest in NSCs. Also NRI’s can’t buy this scheme.
- As per latest changes one can buy NSC in e-mode and Passbook mode also. You should enquire about this new changes in your bank or post office as the implementation may take some time.
- You can also transfer your NSC certificate from one person to another person and also from one post office to another post office.
- One can also avail loan against National Savings Certificates (NSC) in post office.
- You can’t withdraw money before completing 5 years. In case there are some special reasons, pre-mature withdrawal is possible.
- In case of loss of National Savings Certificates (NSC) in post office, you can also request for duplicate NSC certificates provided by various clauses as per post office.
Document required to get National Savings Certificates (NSC) in post office
You need to provide the very basic documents to buy National Savings Certificates and they are :
- The application form for the investment. This is called Form 1 and allows you to declare the investment amount and the nominees.
- Other supporting document may also be asked for and these could include: Proof of identity, Proof of address, PAN card, passport size photographs etc.
How to Buy National Savings Certificates (NSC) Online in Post Office
You have to follow the simple step by step guide to buy NSC certificates. I will be updating the process to buy NSC online from bank website, after verifying the same. This process is strictly for post office users only.
- First of all you have to fill up the necessary forms. Application form 1 is mandatory and with that you can also fill up form 2 which is for nomination facility.
- Provide the amount in cash or cheque or demand draft and get the certificates. In case of cheque or demand draft it will take time till the money get realized.
- Cheque out the names printed properly or spelling mistakes if any before taking the NSC certificates.
Banks issuing NSC in e-mode and Passbook mode – Validate first
Although I am not sure about this, but from various sources I found that one can buy NSC certificates online from below list of bank’s website. You can verify the same from your bank’s also and update here about the truth.
- Andhra Bank
- Axis Bank
- Bank of Baroda
- Bank of India
- Canara Bank
- Central Bank of India
- Corporation Bank
- Dena Bank
- HDFC Bank
- ICICI Bank
- IDBI Bank
- Indian Bank
- Indian Overseas Bank
- Punjab national Bank
- State Bank of India
- State Bank of Bikaner and Jaipur
- State Bank of Indore
- State Bank of Mysore
- State Bank of Patiala
- State Bank of Saurashtra
- State Bank of Travancore
- Syndicate Bank
- UCO Bank
- Union Bank of India
- Vijaya Bank
National Savings Certificates (NSC) in post office is a very good option compared to 5 year tax saving bank FDs, as there is no TDS rules, but the interest earned on NSC scheme is also taxable under section 80TTA up to a limit of Rs 10,000 considering all the interest earned form savings account. This kind of schemes are good for instant and hassle free savings with guaranteed return. In case you have already completed you regular investment and tax savings for the financial year. This kind of investment is good to make your debt part of portfolio strong, but one should not depend 100% on such schemes to create wealth for long run.