Post Office Scheme : If you are among investors who are looking for guaranteed returns along with complete safety of capital, the Post Office National Savings Certificate (NSC) can be an excellent investment option. This scheme is backed by the Government of India, making it one of the most secure savings instruments available.
One of the major advantages of investing in NSC is that it also helps you save tax under Section 80C of the Income Tax Act. The returns earned under this scheme are not affected by market fluctuations, which makes it ideal for risk-averse investors.
This government-backed scheme is especially suitable for people who want to keep their money safe while earning stable and predictable returns. There is no maximum investment limit, while the minimum investment amount is ₹1,000.
Post office Scheme : Interest Rate and Tax Benefits
Currently, the interest rate on National Savings Certificate (NSC) is 7.7% per annum.
Although the interest is compounded annually, the payout is made only at maturity, which is after 5 years.
The interest rate applicable at the time of investment remains fixed for the entire 5-year tenure. The interest earned every year is considered as re-invested, and except for the final year, it also qualifies for tax deduction under Section 80C.
₹2,50,000 Investment Gives ₹1,16,062 Fixed Returns
According to Angel One, the return on NSC is calculated using the compound interest formula:
Maturity Amount = P × (1 + r/n)ⁿᵗ
Where:
- P = Principal amount invested
- r = Annual interest rate
- n = Compounding frequency
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t = Investment tenure
If you invest a lump sum of ₹2,50,000 at an interest rate of 7.7% per annum for 5 years, you will earn a fixed return of ₹1,16,062.
Total maturity amount after 5 years = ₹3,66,062
Who Can Invest in NSC?
- All Indian residents can invest in the National Savings Certificate scheme.
- Non-Resident Indians (NRIs) are not eligible to invest in NSC.
- If a resident investor later becomes an NRI, they can continue holding the certificate till maturity.
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Adults can invest in their own name or on behalf of:
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Minors
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Persons of unsound mind (as guardians)
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- Minors aged 10 years or above can invest in their own name.
- Trusts and Hindu Undivided Families (HUFs) are not allowed to invest.
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However, the Karta of an HUF can invest in his/her individual capacity.
How to Invest in National Savings Certificate (NSC)
You can invest in NSC both offline and online:
1. Offline Method (Post Office)
- Visit your nearest Post Office.
- Fill out the NSC application form.
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Carry required documents:
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Identity proof (Aadhaar, PAN, etc.)
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Address proof
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- Submit the form along with the investment amount (cash/cheque).
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You will receive a physical NSC certificate.
2. Online Method (Through India Post Internet Banking)
- Log in to your India Post Internet Banking account.
- Select National Savings Certificate (NSC) under investment options.
- Choose the investment amount.
- Complete the transaction online.
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The NSC will be issued in electronic form.
Conclusion
The National Savings Certificate is a low-risk, government-backed investment option offering fixed returns, tax benefits, and capital protection. It is especially suitable for conservative investors, salaried individuals, and those planning long-term savings with guaranteed returns.