National Savings Certificates

About the scheme
National Savings Certificates (VIII issue) can be bought by individuals on their own or on behalf of minors, for a minimum denomination of Rs 1000 with multiples of Rs 100 thereafter. They are available at India Post branches. There’s no maximum limit on how much can be parked in these instruments. The interest rate on the NSC is reset at the beginning of every quarter by the Government of lndia.

These certificates have a 5-year term. The interest accrues annually but is deemed to be reinvested in the scheme. At the end of five years, the accumulated amount is paid to the holder. The NSC can be transferred by the holder once during the investment period. The initial investment fetches a tax exemption upto Rs 1.5 lakh under section 80C. The interest is theoretically taxable. However, as it is deemed to be reinvested in the scheme every year, if you have room under section 80C, the reinvested interest can qualify for section 80C benefits.
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