NSC Scheme: If you want to benefit from both superior returns and tax exemption (80C) along with a 100% government guarantee, the National Savings Certificate (NSC) scheme from the Post Office is the best investment option for you.
Key Takeaways
Quick Read- Excellent Returns of 7.70%
- Investment Limit and Account Opening Process
- Deduction up to ₹1.50 lakh
This 5-year fixed-term scheme currently offers a high annual interest rate of 7.70%, making your savings safe and profitable. Learn how you can save up to ₹1.5 lakh in taxes annually by starting with just ₹1,000 and receiving the full amount with compound interest upon maturity.
Excellent Returns of 7.70%
The National Savings Certificate (NSC) is a popular and safe scheme from the Post Office that offers excellent returns to risk-free investors. This scheme is fully backed by a government guarantee, meaning your deposits are completely safe.
Currently, NSC offers an annual interest rate of 7.70%, which is higher than the one-year FD rates of many banks. NSC has a tenure of 5 years, and the best part is that you receive the entire amount in a lump sum at maturity along with compound interest, increasing your total return.
Investment Limit and Account Opening Process
Investing in the NSC scheme is very easy and suitable for both small and large investors. You can start investing in this scheme with a small amount of just ₹1,000. After this, you can increase the amount in multiples of ₹100.
There is no upper limit on the maximum investment; you can invest as much as you want, as per your capacity. Both single and joint accounts can be opened under this scheme. You can easily open this account at any post office in the country.
Deduction up to ₹1.50 lakh
The National Savings Certificate Scheme is also highly beneficial in terms of tax savings. Investments made in NSCs are eligible for an annual tax deduction of up to ₹1.50 lakh under Section 80C of the Income Tax Act, reducing your tax liability. It is important to note that although interest is taxable, TDS is not deducted on it.
This means that you receive the entire interest amount in a lump sum upon maturity, and you have to declare this income yourself according to your tax slab. NSCs thus offer a unique combination of safe investment and tax benefits.
