For those of you who prefer to invest their savings in a risk-free scheme, NSC is a good option. This scheme provides fixed returns and comes with a 5-year lock-in period. Let’s know more about NSC full form, meaning, investment amount and more in this post.
NSC Full Form: National Savings Certificates (VIII Issue) Scheme, 2019
What is NSC?
NSC or the National Savings Certificate is a fixed-income investment scheme that you can open with any post office. Backed by the Government of India, NSC is a low-risk scheme preferred by investors seeking to diversify their portfolios through fixed return instruments.
|Investment Amount||Rs 1,000 |
(in multiples of Rs 100 thereafter)
(no maximum limit)
|Time Period||5 years|
|Interest Payment||6.80% (compounded annually; paid at maturity)|
Who can invest in an NSC Scheme?
If you believe in any of the following categories, you can invest in a National Savings Certificate Scheme:
(i) a single adult
(ii) Joint Account (up to 3 adults)
(iii) a guardian on behalf of minor or on behalf of person of unsound mind
(iv) a minor above 10 years in his own name
Please note that NSC is only open to the individual Indian Residents. HUFs or NRIs cannot invest in NSC Certificate.
Types of NSC Accounts
The following types of accounts can be opened under the NSC Certificate:
(a) Single Holder Type Account (may be opened by an adult for himself, or on behalf of a minor or a person of unsound mind of whom he is the guardian; or by a minor who has attained the age of ten years)
(b) Joint A- Type Account (may be opened jointly in the names of up to 3 adults payable to all the holders jointly or to the survivor or survivors)
(c) Joint B – Type Account (may be opened jointly in the name of up to 3 adults payable to any of the account holders or to the survivor or survivors)
How to Open an NSC Account?
To invest in an NSC scheme, all you need is the following documents:
Documents Required for National Savings Certificates
- Duly filled & signed NSC Application form
- Recent Photograph
- ID proof – Aadhaar card, PAN, etc.
- Address proof – Aadhaar card, Voter ID, etc.
- Cash/cheque deposit of the amount to be invested
How to Invest in NSC Offline?
Once the aforementioned documents are collected, go to any of your preferred Post Offices in India and ask to open an NSC account of your choice.
The official will give you an Account Opening Form (AOF) which you’ll be required to fill as per your correct details. Then, you’ll be required to submit the amount in cash or cheque. Now, attach the KYC documents with this form and submit the same at the counter.
Upon checking the details and submitting the investment amount, your NSC or National Savings Certificate will be printed and given to you.
How to Invest in NSC Online?
Here are the steps for opening an NSC account online:
- Login to Department of Posts DOP eBanking portal.
- Open the General Services section, click on Service Requests and choose New Requests.
- Select NSC Account – Open an NSC Account (For NSC).
- Enter the minimum deposit amount for NSC and choose your debit account linked to Post Office savings account.
- Now, read the terms and conditions and then accept the same to submit the NSC application online.
- Enter the transaction password and click on Submit to complete the NSC online process.
- You can view/download the NCS receipt by clicking on the option that says the same.
Why Should You Invest in NSC?
If you are looking for the safest investment plans, then the National Savings Certificate scheme is one of the best schemes for you. It offers complete protection of the investment and guaranteed interest. National scheme certificate investment offers one of the highest rates of return among the fixed income instruments. You can easily purchase the scheme as it is readily available at all the Indian post offices.
It can be transferred from one post office to another as well as from one person to another without impacting the interest return of the original certificate
Key Features & Benefits of National Savings Certificate Scheme
National Savings Certificate Scheme ensures a guaranteed return of 8% per annum. Moreover, as a government-backed scheme, it can allow an individual to save a total of INR 1.5 lakhs in a year and benefit from section 80c of the Income Tax Act.
One of the main benefits of investing in NSC is the tax advantages that individuals can avail of on the investments they have made in it. The returns on NSC are also guaranteed by the Indian government. Many investors prefer the National Savings Certificate scheme as it can provide a regular income once they retire.
Features of NSC
Affordable Investment Options
The minimum amount that can be invested in NSC is Rs 1,000. Small investments can be made initially, and an individual can increase investments when feasible. There is no maximum limit and you can make as many deposits in a financial year as you prefer. The only factor is to make these deposits in the multiples of Rs 100.
Current NSC Interest Rate
The rate of interest is 6.8% currently, and it is compounded on an annual basis. It should be noted that the interest rate is payable only at maturity. The investment time period in NSC is five years.
Option to add nominees
Account holder(s) can add family members, including minors, in the NSC scheme. In case the investor passes away during the tenure of the NSC scheme, the nominee will be allowed to inherit the scheme.
This scheme is easily available at all Indian post offices. Any Indian citizen can visit the post office and invest in a National Savings Certificate.
Tax Benefits on NSC
There is no TDS on an NSC payout. Also, you can claim tax rebate of up to Rs 1.5 lakhs on your NSC investment u/s 80C of the Income Tax Act, 1961.
NSC can be transferred from the the account holder to another person in the following situations:
(i) On the death of account holder to nominee/legal heirs
(ii) On the death of account holder to joint holder(s)
(ii) On court orders
(iii) On pledging of account to the specified authority
NSC full form: National Savings Certificates.
Yes, once can prematurely close your NSC account before 5 years if:
(a) one (or all) account holders die (b)the same is ordered by court or (c) it’s forfeited by a Gazetted officer.
NSC investment offers tax advantages of up to INR 150,000 under Section 80C of the Income Tax Act, 1961. Additionally, the annual interest generated on NSC investments is considered as a new investment for tax benefits. Also, TDS is not applicable to pay on NSC.
You need to invest at least Rs 1,000 in an NSC account. Thereafter, the amount can be increased in multiples of Rs 100. There is no upper limit for NSC investment.
The current interest rate on National Savings Certificate is 6.8%. So, an investor can earn 6.8% of interest annually. However, the interest is only paid at the maturity, i.e. after 5 years of opening an NSC account.
The income tax deductions on the money invested in the National Scheme Certificate fall under Section 80C of the Income Tax Act, 1961. You can claim up to Rs 1.5 lakhs as deductions using this provision.