The National Savings Certificates (VIII-Issue) Scheme was launched by the Department of Economic Affairs, Ministry of Finance, Government of India to promote a culture of long-term savings. Under this scheme, individuals can invest a minimum of ₹1,000 and thereafter in multiples of ₹100, with no maximum deposit limit. The investment is made for a maturity period of 5 years. This scheme offers different account types including Single Holder, Joint A-Type, and Joint B-Type, accommodating various investment needs. The interest rate is attractive at 7.7% per annum compounded annually, although it is payable only at maturity. Additionally, NSCs can be pledged to secure loans.
Benefits
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Attractive Interest Rate:
Earn an interest of 7.7% per annum compounded annually, payable at maturity. -
Flexible Investment:
Invest a minimum of ₹1,000 and thereafter in multiples of ₹100, with no maximum deposit limit. -
Multiple Account Options:
Choose from Single Holder, Joint A-Type, or Joint B-Type accounts based on your needs. -
Loan Facility:
NSCs can be pledged as collateral to avail of loans from banks. -
Maturity:
The certificate matures after 5 years, with the maturity value for a ₹1,000 deposit being approximately ₹1,462.54 (rounded to the nearest rupee as per scheme guidelines).
Eligibility
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Who Can Invest:
Any individual who is a resident of India is eligible to invest in NSCs. -
On Behalf of Others:
A guardian may open an account on behalf of a minor or a person of unsound mind. -
Minimum Age for Minors:
A minor must be at least 10 years old to have an account opened in their name.
Deposits
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Minimum Investment:
₹1,000. -
Subsequent Deposits:
Any additional deposit must be in multiples of ₹100. -
Account Quantity:
There is no maximum limit on deposits, and an individual may open multiple accounts.
Payment on Maturity
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Maturity Period:
5 years from the date of deposit. -
Maturity Value:
For example, an account opened with ₹1,000 will mature to approximately ₹1,462.54, with fractional rupees rounded off as per guidelines. -
Documentation:
A certificate of annual accrual of interest is available upon request from the accounts office.
Application Process
Offline
- Visit a Branch:
Go to the nearest Post Office or designated bank. - Collect Application Form:
Collect the NSC application form or download it from the official website. - Complete the Form:
Fill out the application form and attach all required documents, including declaration and nomination details. - Submit with Deposit:
Submit the form along with an initial deposit to open your NSC account. - Acknowledgment:
Receive a receipt or acknowledgment that marks the initiation of your NSC account.
Premature Closure
- Before 1 Year:
If closed before one year, only the principal amount is payable. - After 1 Year but Before 3 Years:
Premature closure is allowed, and interest is paid on the principal for the complete months the account has been held at the current Post Office Savings Account rate.
Transfer of Account
- In Case of Death:
The account may be transferred to legal heirs or nominees as specified. - Court Order:
Accounts may be transferred by court order or as per the stipulations in the case of a pledge. - Joint Accounts:
In a joint account, if one account holder dies, the account is transferred to the surviving member(s).
Frequently Asked Questions
- What is National Savings Certificate?
NSC is a long-term savings instrument issued by the Government of India, offering a fixed interest rate and a 5-year maturity period. - Who is eligible to invest in NSCs?
Any individual who is a resident of India can invest in NSCs. A guardian can open an account on behalf of a minor or a person of unsound mind. - Can non-residents invest in NSCs?
No, NSCs are available only to residents of India. - Is there any age restriction for NSC investors?
There is no age restriction for adults. Minors can invest if they are at least 10 years old. - What are the available tenures for the scheme?
The NSC scheme has a fixed tenure of 5 years. - What is the current rate of interest offered on the scheme?
The current interest rate is 7.7% per annum compounded annually, payable at maturity. - How can I apply for National Savings Certificates?
You can apply by visiting the nearest Post Office or designated bank to collect and submit the application form. - Can NSCs be transferred to another individual?
NSCs can be transferred in certain cases, such as in the event of the investor’s death or by court order, subject to the scheme guidelines. - What happens in case of the investor’s demise?
In the event of the investor’s death, the eligible balance is transferred to the nominee or legal heirs as per the specified procedures.