How can I invest in National Savings Certificate?

How can I invest in National Savings Certificate?

How can I invest in National Savings Certificate?

Indian citizens are very familiar with India Post since childhood.  

It was the only medium of communication for millions of people and has now become a popular financial services provider in the country.  

From 1 September 2018, India Post is running IPPB (India Post Payments Bank) across the country.  

Is NSC a good investment option?

It is a 100% government owned bank which has allowed around 17 crore postal savings bank accounts with IPPB.  

The bank provides an array of financial services to Indian citizens, including :

Account services, 

QR Code payment services, 

UPI (Unified Payment Interface), 

NEFT (National Electronic Funds Transfer), 

IMPS (Immediate Payment Service), 

Real time gross settlement,  

Bill payment, DBT (Direct Benefit Transfer) etc. 

through Post Office and its wide network of e-banking.  

It is now about the spread and reach of IPPB. 

How can I invest in National Savings Certificate?

National saving certificate maturity

If you are thinking of starting any safe investment then there are many savings schemes in the IPPB Post Office which will help you save your money and earn as you are investing them.  

For income tax payers, NSC (National Savings Certificate) is a popular investment option.  

Let us know more about this investment scheme described by India Post.

National Savings Certificate (NSC):

As discussed earlier, the scheme is very popular among income tax payers.  

Many people may not be aware of a scheme that provides a safe and convenient way to invest their hard-earned money.

Investment Period:

NSC has a defined duration, i.e. 5 years as per the 8th digit.

Rate of interest:

If you are investing in NSC, you will get 7.9% per annum (from 1 July 2019) and it accumulates annually.  

However, it is payable after maturity.

Limit in minimum and maximum balance:

Minimum Rs.  1000 / - and in multiples of Rs.  100 / - can be invested for NSC.  

There is no maximum investment limit.  

A certificate was issued earlier and now (from 1 July 2016), a passbook for NSC account is issued.

Who can open NSC account?

Following people can open NSC account in IPCB and Post Offices

On behalf of a minor, an adult can open an account

Minors above 10 years of age can open an account

A person without mind can also open an account with the help of a parent

A single adult can open an account

Joint 'A' type account can be opened with a maximum of 3 adults (in this case, the amount is payable for both)

A joint 'B' type account can be opened with a maximum of 3 adults (in this case, the amount is either payable)

Scope of Income Tax Exemption:

If you are an income tax payer, you can look for sources where you can invest and get tax rebate at the same time.  

NSC is here for you.  It comes under Section 80C of the IT Act.  

Your NSC qualifies for the deposit tax exemption, but be sure to calculate the total amount of your 80C investments.  

As per 80C, you will get a maximum of Rs.  Can invest in  1,50,000 / -.

Transfer of NSC from one person to another:

Yes, it is possible.  After opening the NSC can be transferred to another person only once from the date of opening till the date of maturity.  

In this case, the old name will be rounded up by the post office and the name of the new holder will be written on the passbook, following other procedures and formalities.

How does this investment raise money

Although the interest rate for NSC is 7.9%, you can look for an actual calculation that shows your money increasing and after 5 years it is going against your investment from this scheme.  

Let's have a calculation for Rs.  70,000 / -

NSC Count:

Base investment amount - Rs.  70,000 / -

Interest provided by IPPB - 7.9% per annum which is compounded annually

Investment Period - 5 years

Let's calculate based on the above details and see how much you will get after 5 years.

Yr  Interest for  Totoal        Totoal Balance            the year       interest      for the year

1     5,530.00       5,530.00     75,530.00

2     5,966.87     11,496.87     81,496.87 

3     6,438.25     17,935.12     87,935.12

4     6,946.87     24,882.00     94,882.00

5     7,495.68     32,377.68   102,377.68

During maturity, the amount is Rs.  70,000 / - Rs.  102,377.68 / -.  

This means that the total amount of Rs.  32,377.68 is your profit by investing seventy thousand rupees.  

Additionally, you have a tax rebate on the base investment amount for 1 year.

Is this not a good investment plan?  

Hopefully this article will help Indians who plan for long term investment and give good returns over a period of five years.  

As India Post is a government institution, it is safe and 100% secure.

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