NSC Interest Rate

NSC, abbreviated for National Savings Certificate, is one of the most popular investment instruments for assured returns and tax benefits. It was launched in the 1950s and soon gained immense popularity due to its Government-backed benefit and minimal risk feature. 

Are you a traditionalist investor who seeks assured returns from a short-term investment? If so, the NSC interest rate will entice you and surely balance your investment portfolio. The Indian Government decides and fixes the NSC or National Saving Certificate interest rate while ensuring revise it every quarter. 

NSC Interest Rate 2023

The current NSC interest rate is 7.7%, which is compounded once every year. You’ll get numerous tax benefits on both the investment and interest amount procured under Income Tax Act, 1961, Section 80(C). So, read till the end to learn more about NSC interest rates. 
 

NSC Interest Rate: Discover All Its Historical Data

The Ministry of Finance ensures revising the National Saving Certificate interest rate quarterly. This interest is compounded once every year. However, you can claim it only upon maturity. Here is a table representing the NSC interest rate of the past few years: 

Interest Applicable on NSC Premature Withdrawal

Here is a table representing the various interests present in NSC applications:

Moreover, the particular situations under which you can withdraw your NSC investments are listed below. Regarding premature withdrawal, the latest NSC interest rate in the post office is considered to calculate the return. However, the tenure or duration gets shorter. 

The withdrawal can be made upon the following scenarios:

●    The death of the certificate owner
●    If the court of law orders to withdraw the investment 
●    When the certificate gets forfeited. 

All the applicants must remember that even though the NSC interest rate stays unhinged or unaltered, they will need some specific documentation for premature withdrawal, which are:

●    NSC encashment form (filled up)
●    Original NSC documents
●    Annexures 1 and 2 forms (for nominees)
●    Attestation of the guardian (for minors)

NSC Application Procedure

Things become simple and quick when it comes to the NSC application procedure. Applicants who wish to buy an NSC must visit their nearest post office branch and ask for the requisite forms. 

They must fill out the forms and submit them along with the requisite documentation (as mentioned above). To make the payment for your investment amount, you can choose either cheque or cash as your payment method. 
 

How to Calculate NSC Interest Rate

The NSC scheme comes with a maximum tenure of five to ten years. The current NSC interest rate is 6.8%, which is compounded every year. The minimum amount you can invest is INR 100, while there is no maximum investment limit. To understand how to calculate the NSC interest rate, let’s take an example. 

Consider these aspects: 

●    Investment Amount: INR 5,000
●    Tenure: 5 years
●    Rate of Interest: 6.8% pa
●    Purchased on: 1st February 2020

Eligibility Criteria For NSC

When it comes to eligibility criteria, NSC usually only needs the investor to be an Indian resident, irrespective of their age. 

However, one must be aware of the necessary documentation required to save in NSC. Failure to submit any of their required documentation can result in your ineligibility to invest in this scheme. 

The fact that the scheme doesn’t mention any age requirement as its eligibility criteria imply that individuals from every age group can leverage the perks offered by this plan. 

Besides glancing at the NSC interest rate table, you must also check the list of documentation below, as their submission will play a key role in determining your eligibility to buy an NSC plan. 

Eligibility Criteria: 

Here is a list of the eligibility criteria that an investor must meet to buy a National Savings Certificate: 

●    The investor should be an Indian citizen.
●    Individuals of any age group can invest in NSC.
●    Non-resident Indian citizens are not eligible to invest in NSC.
●    There isn’t any maximum investment limit, but the minimum investment amount is INR 100.
●    One can purchase NSC for a maturity tenure of five years from any Indian Post Office. 
●    You can invest on behalf of a minor or with another adult.
●    NSC is issued in multiple denominations, ranging from INR 100 to INR 10,000. 
●    Under the NSC VIII issue, Trusts and HUFS are ineligible to invest in this scheme. 
●    The majority of banks accept NSC as collateral security for any loan.
 

NSC Documentation Requirement

Here is a list of all the documents that you must submit to the Indian Post Office to buy an NSC: 

●    Investors need to submit an original and valid ID proof such as Senior Citizen ID, Driving License, Voter ID, PAN Card, Government ID card, or Passport for verification purposes. 
●    After filling in all the mandatory field marks, you’ll have to submit the NSC application form. 
●    You’ll have to attest and submit a copy of your photograph. 
●    You must attest and submit address proof such as your telephone bill, passport, electricity bill, bank account statement, or any ID card or certificate issued by the Indian Post Office. 
 

Benefits of NSC

Here are the few primary benefits of investing in the NSC scheme: 

●    One of the significant benefits of purchasing an NSC is the tax benefits associated with it. Plus, investments made under this scheme are entitled to guaranteed returns. Several individuals opt for the NSC scheme because it guarantees a regular income after retirement. 
●    Excluding the interest earned based on the NSC interest rate in the final year, the rest of the interest amount is tax-exempt. 
●    No matter if your original certificate is misplaced or damaged, you can easily apply and get a duplicate one. 
●    The scheme permits the transfer of the certificate from one person to another. But this is permissible only during the lock-in (maturity) period. 
●    People benefit from investing in this scheme even after the maturity period. 
●    The National Savings Certificate interest rate is compounded once every year, and the interest amount gets reinvested for the scheme. Thus, you get the benefit of an increase in your invested amount every year without even buying certificates.