NSC - National Savings Certificate Interest Rate & Tax Benefits (2024)

FAQs

NSC - National Savings Certificate Interest Rate & Tax Benefits? ›

NSC is a secure government-backed savings product with a 7.7% annual interest rate. Individuals can invest up to Rs. 1.5 lakh per year, enjoying tax benefits under section 80C. Only individuals, not HUFs or trusts, can invest.

What is the current interest rate of the National Savings Scheme? The NSC rate of interest is 7.7% p.a.

Contributions to PPF qualify for tax deductions under Section 80C of the Income Tax Act, making it a tax-efficient investment. While the interest earned on NSC is taxable, it meets all requirements for tax exclusion under Section 80C up to the prescribed limit, which is 1.5 lakh rupees annually.

The National Savings Certificate is the right choice for you if you are willing to lock your funds for 5 years, and also want to save some taxes. The Kisan Vikas Patra might be a better choice for you if you want higher liquidity, as you can withdraw your funds after 2.5 years of opening the account.

It's specified that no deposit from the National Savings Monthly Income Account shall be withdrawn before the expiry of 1 year from the date of deposit. This indicates a mandatory lock-in period of 1 year, during which investors cannot make any withdrawals.

For investments you're managing online or by phone, simply log in or call us for a valuation. You can also see the value of your investments on your homepage. If you have an Investment Guaranteed Growth Bond, you can only get a valuation online.

NSCs are also backed by the Indian government, so they are considered to be a very secure investment. The government of India also provides a deposit insurance scheme to NSC holders, which covers up to Rs. 1 lakh of the amount invested in case of any loss or theft.

Damage Protection

Another great feature of PPF on your car is that it protects your car's body paint from scratches due to minor accidents, abrasions and rock chips and maintains its near-mint condition for years.

What are the disadvantages of KVP? ›

What are the disadvantages of KVP? Unlike some investments like Public Provident Fund (PPF) or tax-saving fixed deposits, Kisan Vikas Patra (KVP) doesn't offer any tax advantages. The money you make from KVP is subject to taxes, and this could affect your overall earnings, especially based on your income tax bracket.

In the current month, NSC has received 10 Buy Ratings, 8 Hold Ratings, and 0 Sell Ratings. NSC average Analyst price target in the past 3 months is $262.58.

Capital and Inflation Protection

The NSC is however not inflation protected. This means that whenever inflation is above the current guaranteed interest rate, the deposit earns no real returns. However, when the inflation rate is below the guaranteed interest rate, it does manage a positive real rate of return.

Log in or call us at any time with your NS&I number and password to hand. Or complete a cashing in form and send it to us. You have to keep your Bond for the whole of the chosen term – you can't cash it in before then.

You can only withdraw the NSC from the post office where the certificate is registered. While visiting the post office, you should carry your original NSC certificate along with identification documents such as an Aadhaar card, PAN card, and any other document required by the post office.

The 4% rule is when you withdraw 4% of your retirement savings in your first year of retirement. In subsequent years, tack on an additional 2% to adjust for inflation. For example, if you have $1 million saved under this strategy, you would withdraw $40,000 during your first year in retirement.

Interest rate: Currently, the rate of interest is 7.7% p.a. for Q1 FY 2024-25, which the government revises every quarter. It gets compounded annually but will be payable at maturity. Maturity period: The maturity period is five years.

Suppose you purchased an NSC certificate by investing ₹50,000 for 5 years at an interest rate of 6.8% compounded annually. Therefore, the NSC amount on maturity after 5 years, providing 6.8% annual interest, will be ₹69,000.

10,000. There is no maximum investment limit and the interest rate is 7.7%. The maturity period for these certificates is ten years and is subject to the same NSC rules as Issue VIII. However, now it is not possible to invest in this type of NSC scheme as the Government of India took the decision to discontinue it.

For example, if you invest ₹1,00,000 in NSC for 5 years at a current interest rate of 7%, the NSC interest rate calculator can be used to calculate the total maturity value, which would be INR 1,40,255.