NATIONAL SAVINGS CERTIFICATE
A savings bond promoted by the Government of India.
DETAILS AND FAQ
National Savings Certificate can be bought by any Resident Individual in his/her name, jointly with another adult or on behalf of a minor. Deposits are accepted through post offices.
- Currently, there is only one issue available (NSC VIII issue) with a maturity period of 5 years.
- There are 3 types of certificates available:
- Single Holder Type Certificate – issued to the holder himself or on behalf of a minor
- Joint A Type Certificate – issued jointly to 2 adults and payable to both holders on maturity
- Joint B Type Certificate – issued jointly to 2 adults but payable to either holder on maturity
- Minimum amount of investment is ₹100 and there is no maximum limit. The Certificates can be bought in denominations of 100, 500, 1000, 5000 and 10000.
- The current rate of interest is 7.8% compounded annually. The rate of interest will now be reviewed every quarter by the Government.
- The interest is taxable. However, the interest accrued is deemed to be re-invested and is paid out only on maturity. Therefore, the individual is required to first disclose the interest as income and then claim a deduction under section 80C.
- There is no tax deduction at source (TDS).
- The Certificate is redeemable only on maturity by submitting the Certificate to the post office.
- Redemption before maturity is possible only on the death of the holder or when ordered by a court of law.
- If the Certificate is not redeemed on maturity, the post office continues to pay simple interest for a maximum of 2 years at the rate of a post office savings account.
- If planned well, NSC can be a tool for retirement planning and a source of income post retirement. For example, if an individual invests in NSCs every year for 10 years starting 5 years before his retirement age, he ensures a constant source of income for 10 years post retirement.