National Savings certificate- A safe and secure way to save money
We all need to save some money for our future expenses. There are definitely various ways of saving money. One must adopt the most secure and safe method for such saving. National Savings Certificate is one such way which has been made available by Government of India. You not only save money but at the same time can save on tax payments by having such a saving. One can easily have such certificates from any Indian Post office. There are certain facts which you must be aware of regarding NSC.
In order to have an NSC the person must be an Indian citizen and must be an adult.
NSC can be had for a period of 5 or 10 years. The interest rate varies according to the tenure for which one purchases the certificate. The interest rate is compounded quarterly. The rate changes each year and such changes are announced by Government of India. The Five years tenure of NSgives an interest of 8.1% and the Ten years provides an interest 8.8%. The interest is not paid to the holder of the certificate but is reinvested in NSC.
There is no tax deducted at sources. The interest earned must be reflected in the Income Tax return of the holder. There is tax relief which a holder can be had. The maximum deduction that can be claimed under 80C is Rs. 1, 50,000.
Minimum and Maximum Investment
It is good to know about the amount of investment that one can make. The minimum amount that can be invested is Rs. 100 and there is no maximum limit to the investment that can be made. The certificates are of various values like Rs. 100, Rs. 500, Rs.1000, Rs.5000 and Rs.10, 000. One can have any number of such certificates.
Types of certificates
There are three types of NSC which one can have.
Single Holder Type Certificate: The holder holds the certificate in his name or in the name of a minor.
Joint A type certificate: This nature of certificate can be held by two adults and the amount can be payable to both.
Joint B type certificate: This nature of certificate can be held by two adults and the amount can be payable to either of the holder.
What happens at maturity?
After the tenure ends, the certificates have to be produced at the Post Office. Holders need to sign at the back of the certificate to receive the payment.
Nomination can be done for NSC. It can be done when it is purchased or during the tenure of the certificate. Different forms have to be used for such nomination.
NSC can be redeemed prematurely in the death of any holder. It can also be redeemed by the pledge of a Gazetted Government Officer or by the order of court.
Issue of duplicate certificate
The duplicate certificate can be issued if the certificate is lost, destroyed or mutilated.