National Savings Certificate: Govt-Backed NSC Offers Tax Benefits, Don't Miss New Interest Rates

National Savings Certificate (NSC) is a government backed fixed income investment scheme that Indian government launched. The scheme has emerged ideal for conservative investors looking for low-risk plans for steady income. The scheme caters perfectly for those investors who are keen to invest and want to save taxes. Investors will be eligible to invest in their name, on minor's behalf, and jointly by simply visiting nearest post office. The maturity period of NSC has been fixed at five years.

Meanwhile, amount of NSCs that can be bought has no upper limit. NSC is a fixed return scheme. The scheme remains available at all NSC post offices and emerged quite popular amid several benefits. The main goal of the scheme is to encourage small, medium savings where investors can avail tax benefits. As the scheme has government backing, the risk factor remains low.

Investors can get guaranteed returns under NSC scheme. The government has already announced the latest interest rates for its several schemes namely Senior Citizen Savings Scheme, Sukanya Samriddhi, and PPF for the April-June quarter along with National Savings Certificate.

It is worth mentioning here that government revises interest rates for its various small savings schemes every quarter. Meanwhile, the rate of interest for National Savings Certificate scheme remains unchanged at 7.7% for the April-June quarter.

National Savings Certificate Eligibility: Below are the eligibility criteria that investors must not miss:

• The individual must Indian citizen
• No age limit has been set for the individuals when it comes to purchasing the certificate
• Non-Resident Indians are not allowed to make investment in NSC
• Individuals are eligible to make investments with another adult and individuals will be allowed to buy NSC on behalf of a minor
• HUFs and Trusts cannot invest under the scheme under the NSC VIII issue

Who Can Open NSC?

• Any individual can open NSC account under their own name
• Up to 3 adults will be eligible to open an NSC account jointly
• Guardians can also open NSC accounts minors' behalf or for individuals deemed to be of unsound mental faculties
• Minor above 10 years will be eligible to open an NSC account in their name

Minimum Deposit Requirement: The minimum deposit needed to open an NSC account should be Rs 1000 with subsequent deposits in multiples of Rs 100
No Maximum Limit: There is no maximum limit on the amount that individual can deposit

Benefit of Tax: It is worth mentioning here that deposits made under NSC accounts qualify for deductions under section 80C of the Income Tax Act

Maturity Period: The NSC deposits have a maturity period of five years from the deposit date

Pledging of Account: It is important to note here that NSC accounts will be eligible to be pledged or transferred as security under a few situations. It will require depositing a prescribed application form at the nearest post office along with an acceptance letter from pledgee.

These accounts can be transferred or pledged to several authorities that may include RBI, President of India, Scheduled Banks, Corporations (Public/Private), Govt companies, Housing Finance Companies, and local authorities, among others.

No Premature Closure: It is not allowed to close NSC accounts prematurely before the maturity period of 5-years except under a few situations given below:

• On death of a single account holder or all account holders in joint account
• On court order
• Forfeiture by a pledgee who is a Gazatted officer