Thread by @myfinology

All you need to know about National Savings Certificate (NSC)

- Eligibility Criteria
- Min Max Deposit
- Interest Rate
- Tax Benefits
- Maturity Period
- Withdrawals
- Loan Facility

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National Savings Certificate (NSC) is a government-backed investment scheme launched on 8th May 1989 that combines guaranteed returns with tax savings.

#Investment #personalfinance

It's a kind of fixed investment scheme that can be opened in any post office branch. As this instrument is backed by GOI, there is no risk of default.

#Rupee

The current interest rate for the NSC scheme is 6.80%. The interest is compounded annually and paid at maturity.

The maturity period of NSC is 5 years and premature closure is not allowed expect some conditions.

If you withdrew your funds within one year from the investment date, only the principal value is returned.

Who should invest?

- If you want to have a guaranteed return
- If you are looking for a low income option
- If you want to save tax

Taxation :

- Tax deduction can be claimed u/s 80C of the Income Tax Act
- The interest that is accrued each year is accumulated in the account and that is also eligible for tax rebate under section 80C.

- Since the maturity period of NSC is 5 years, the interest can be re-invested only for four years. The interest earned in the fifth and final year is taxable.

- Loans against NSC:

The certificate can be used as a collateral to avail loans from banks. However, the respective post master must authorize the transfer of the certificate to the bank.

- Minimum Deposit - 1k
- Maximum Deposit - No Limit
- Eligibility - Indian resident above 10 years
- Maturity - 5 yrs
- Int Rate - 6.8%
- Tax Benefits - Upto 1.50 lakhs under sec 80C

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