National Savings Certificate: Invest Rs 5 lakh, get Rs 7.24 lakh; Here's how

National Savings Certificate (NSC) is a great investment opportunity with minimal risk. It also offers income tax benefits under Section 80C. It's a secure investment plan suitable for everyone.

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So many benefits?

Post Office Savings Schemes are incredibly popular in India. The National Savings Certificate (NSC) is a low-risk investment option that has earned the trust of Indians for years. You can easily open an NSC account at any bank or post office. Its primary goal is to encourage small and medium-income investors to invest.

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A plan for everyone

NSC offers income tax benefits under Section 80C. Like some fixed-income instruments such as Public Provident Fund and Post Office Time Deposits, NSC provides guaranteed interest and complete capital protection. However, unlike tax-saving mutual fund schemes and National Pension Schemes, NSC cannot provide inflation-beating returns. As a safe investment, it is suitable for everyone.

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Reliable scheme

Many people, especially from middle and lower-income groups, choose NSC. The government promotes NSC as a savings scheme for Indian citizens. Earlier, post offices issued physical NSC certificates. This practice changed in 2016. If you have a bank or post office savings account, you can purchase NSC electronically through internet banking. You can buy it in your name or your child's name. This scheme is helpful for those who want to save small amounts.

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Income tax exemption is a must

NSCs offer a fixed annual interest rate, currently at 7.7% per annum. However, it's important to note that this is subject to change. NSC is a prominent government-backed tax-saving scheme. You can claim income tax deductions up to ₹1.5 lakh per year under Section 80C. If you invest ₹1.5 lakh annually, you can claim it under 80C and get tax benefits.

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Reinvested interest

You can join this scheme with a small amount. You can invest from a minimum of ₹100 to any maximum amount. NSC certificates are accepted as collateral for secured loans from banks and non-banking financial institutions. This scheme works on a compound interest basis. The earned interest is reinvested annually and paid as a lump sum at maturity.

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No TDS deduction

You can nominate any family member, including your children. In case of the investor's unexpected death, the nominee can receive the amount. Upon maturity, the investor receives the entire invested amount. Since there's no TDS on NSC returns, the subscriber must pay the applicable tax when filing their income tax return.

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Current NSC details

Interest rate: 7.7% per annum, Maturity: 5 years, Tax exemption: Up to ₹1.5 lakh under 80C, No maximum limit, NSC can be used as collateral for bank loans.

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What if you invest ₹5 lakh in NSC?

Investment: ₹5,00,000, Annual interest rate: 7.7%, Term: 5 years, Interest compounding: Annually, Maturity value after 5 years: ₹7,24,513, Profit: ₹2,24,513

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Key reasons to choose NSC

Full government backing, No market risk, Tax benefits under 80C, Suitable for new investors, Can be used for loan needs.

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Where to buy NSC?

At your nearest Post Office, Via the India Post website, Through authorized online financial services.

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Want financial security?

Want security in today's uncertain financial world? Looking for a good return with government backing and tax benefits, without market risks? Then NSC is a reliable choice for your financial future.