If you are planning to invest in something, then this article is for you. The National Savings Certificate (NSC) is a well-liked and trustworthy Small Savings Scheme offered by the Post Office, providing solid returns with minimal risk. If you’re looking for a secure and steady investment, this government initiative could be a fantastic choice for you. Investing in NSC yields returns that surpass those of a typical bank savings account, and its interest rates are comparable to fixed deposit schemes from various banks.

 

For instance, if you invest Rs 15 lakh in NSC, you could earn Rs 6.50 lakh in interest. Here’s how it breaks down: the current interest rate is 7.7% per year, compounded annually, which means you earn interest on your interest each year. Keep in mind that the interest is paid out only after the maturity period of 5 years. So, if you put in Rs 15 lakh into the National Savings Certificate, by the end of the term, you’ll receive over Rs 6.50 lakh in interest on top of your initial investment. Here’s the full calculation:

 

– Deposit amount: Rs 15 lakh

– Interest Rate: 7.7% compounded annually

– Tenure: 5 years

– Total amount at maturity: Rs 21,73,551

– Interest earned: Rs 6,73,551

 

This means that a Rs 15 lakh investment will yield around Rs 6.7 lakh in profit after 5 years, which is quite impressive.

 

Who can invest in NSC and what are the limits?

 

You can purchase the National Savings Certificate at any post office branch. The minimum investment is Rs 100, and there’s no upper limit, so you can invest as much as you like. You can open an account individually or jointly, and it comes in the form of a passbook.

 

Here’s a neat fact: you can also buy NSC in the name of your minor children, making it a great way to secure their financial future. However, certain groups, like NRIs (Non-Resident Indians), HUFs (Hindu Undivided Families), companies, and trusts, are not eligible to invest in this scheme.

 

What’s the tax situation with NSC?

 

When you invest in the National Savings Certificate (NSC), you can enjoy a tax exemption under section 80C of the Income Tax Act, but remember, this benefit is limited to investments of up to Rs 1.5 lakh. Regarding interest, for the first four years, the interest you earn will be reinvested, allowing you to benefit from tax exemption. However, after five years, you’ll need to pay tax on the interest earned, based on your applicable tax bracket.

 

Withdrawal options

 

A key point about NSC is that you can’t withdraw your funds before the maturity date. The only exception might be in the event of the account holder’s death, but typically, early withdrawal isn’t allowed.

 

If you’re looking for a secure investment with guaranteed returns, the National Savings Certificate (NSC) could be an excellent choice. It provides tax benefits, a competitive interest rate, and the flexibility to invest any amount, from the minimum to larger sums. So, if you want solid returns without the risk, consider putting your money into NSC.

 

Desclaimer: For any financial invest anywhere on your own responsibility, Times Bull will not be responsible for it.