All You Wanted To Know About National Saving Certificates (NSCs)

National Savings Certificate, popularly known as NSC, is a post office tax saving instrument that combines adequate returns with high safety. NSCs are an instrument for facilitating long-term savings.

How to Invest

National Savings Certificates are available at all post-offices. The application can be made either in person or through an agent. Post office agents are active in nooks and corners of the country. Following types of NSC are issued:

• Single Holder Type Certificate: This can be issued to: (a) An adult for himself or on behalf of a minor (b) A Trust.
• Joint 'A' Type Certificate: Issued jointly to two adults payable to both holders jointly or to the survivor.
• Joint 'B' Type Certificate: Issued jointly to two adults payable to either of the holders or to the survivor.

Who can Invest

• An adult in his own name or on behalf of a minor
• A trust
• Two adults jointly

Denominations and Limit

National Savings Certificates are available in the denominations of Rs. 100, Rs 500, Rs. 1000, Rs. 5000, & Rs. 10,000. Minimum investment required is Rs. 100 and there is no maximum limit on the purchase of the certificates

Maturity
Period of maturity of a certificate is six years. Presently interest paid is 8 % per annum half yearly compounded. Investment of Rs. 1000/- grows to Rs. 1601/- in six years.

Premature Encashment of NSCs

Maturity value of a certificate of any other denomination is at proportionate rate. Premature encashment of the certificate is not permissible except at a discount in the case of death of the holder(s), forfeiture by a pledgee and when ordered by a court of law. 

Tax Benefits

• Interest accrued on the certificates every year is liable to income tax but deemed to have been reinvested.
• Income Tax rebate is available on the amount invested and interest accruing under Section 80C of Income Tax Act, as amended from time to time.

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