You may feel that several Fixed Deposit schemes of banks are overrated when compared to the high interest rates and other benefits offered by several Post Office schemes. Consider the National Saving Certificates offered by the post office. The scheme currently offers an interest rate of 7.9 per cent, which is compounded annually, on deposits for five years. It also comes bundled with certain income tax benefits. At the current rate of interest, Rs 100 invested in NSC today can turn to Rs 146.25 after just sixty months (five years). Similarly, if you invest Rs 10,000 in NSC today, it will grow up to Rs 14,824 in sixty months; while Rs 1,00,000 can grow up to Rs 1,48,246 in the same time period.
You can buy 5 Years National Savings Certificate (VIII Issue) from post offices.
Putting money in NSC could be a win-win opportunity for you as the deposits also qualify for tax rebate under Section 80C of Income Tax Act. Under this section, investment up to Rs 1.5 lakh/per annum are exempted from tax. If you invest Rs 1.5 lakh in NSC today, it can grow up to Rs 2.2 lakh in sixty months and also help you save tax.
– A single holder type certificate can be purchased by, an adult for himself or on behalf of a minor or by a minor.
Deposits in NSC
– The interest accruing annually but deemed to be reinvested under Section 80C of IT Act.
– In case of NSC VIII , transfer of certificates from one person to another can be done only once from date of issue to date of maturity.
– At the time of transfer of Certificates from one person to another, old certificates will not be discharged. Name of old holder shall be rounded and name of new holder shall be written on the old certificate and on the purchase application(in case of non CBS Post offices) under dated signatures of the authorized Postmaster along with his designation stamp and date stamp of Post office.
– Minimum and Maximum deposit: Minimum of Rs. 100/- and in multiples of Rs. 100/- No Maximum Limit. (With inputs from India Post website)