Save tax, earn high interest with zero TDS by investing in NSCs

Save tax, earn high interest with zero TDS by investing in NSCs

What is National Savings Certificate (NSC)?


National Savings Certificate or NSC is an investment option introduced by the Government of India in order to motivate individuals to indulge saving habits and channelize in the correct direction. NSC is issued via Post Offices as this agency makes it accessible to the common people. The sum total created through these deposits is utilized for the country’s growth and development.


Who can buy NSC?


  • Any individual whether singly or jointly along with other adult can buy NSC
  • A guardian or parent on his or her minor’s behalf can buy NSC


Who are not eligible to buy NSC?


  • Hindu Undivided Families (HUF’s) as well as Trusts cannot invest in NSC
  • Non-Resident Indians (NRI’s) are also not eligible to buy NSC. On the other hand, if an individual was an Indian Resident while buying NSC and becomes an NRI during maturity period, then he or she is eligible to hold this certificate till its maturity


Where to buy NSC?


  • NSC’s are certificates that are issued by the Department of Post, Govt of India and are accessible at almost all the post offices of the country. The Certificate may be relocated from the post office to the other post office provided you make an application in approved format at any of the two offices.


The payments for purchasing of NSC can be done to the P.O. in any one of the following modes mentioned underneath:


  • Cash
  • By putting forward an application for fund withdrawal from the P.O. Savings Bank Account
  • Cheque, Demand Draft or Pay Order drawn in goodwill of the Postmaster
  • By giving away an old matured certificate, thereby stating at the back of the certificate given away ‘Received payment through issue of fresh certificate, vide application attached
  • The Postmaster must issue new Certificate of NSC on that spot if possible or must issue provisional receipt to the buyer, which may later on be exchanged with NSC at the time of issue.


Types of NSC and their Rate of interest


National Saving Certificates or NSC offers a very good return on investments. There are currently two types of NSC available.


These are NSC VIII issue and NSC IX issue.


  • While the NSC VIII issue offers 8.50% of interest, investors get a hefty 8.80% of interest with NSC IX issue.
  • With NSC VIII issue, the maturity value of certificate of Rs 100 will be Rs 151.62 after 5 years.
  • With NSC IX issue, the maturity value of certificate of Rs 100 will be Rs 234. 35 after 10 years.
  • It is important to note that in case of NSC the interest is compounded half-yearly and therefore interest is reinvested.


Various Kinds of NSC


Three types of NSC certificates are there which are mentioned below:


  1. Single holder Kind Certificate: This NSC is subjected to the holder himself / herself or maybe on minor’s behalf
  2. Joint A Kind Certificate: This NSC is issued subjected for 2 adults and allocated to both holders mutually
  3. Joint B Kind Certificate: This NSC is subjected jointly for 2 adults and allocated to either of them