Indian citizens are quite familiar with India Post since their childhood. It was the only medium of communication for millions and now it has become a popular financial service provider in the country. Since 1st September 2018, India Post is running the IPPB (India Post Payments Bank) throughout the country. This is a 100% Government owned bank that has allowed near about 17 crore postal savings bank accounts with IPPB. This bank provides an array of financial services to Indian citizens including, account services, QR code payment services, UPI (Unified Payment Interface), NEFT (National Electronic Funds Transfer), IMPS (Immediate Payment Service), real-time gross settlement, Bharat Bill pay, DBT (Direct Benefit Transfer) etc. through its wide network of post offices and e-banking. This is all about the spread and reach of IPPB now. If you are thinking of any safe investment start banking with IPPB. Post office has many saving schemes that will help you to save your money and earn as you are investing them. For income taxpayers, NSC (National Savings Certificate) is a popular investment option. Let’s get to know more about this investment scheme as described by the India Post.
National Savings Certificate (NSC):
As discussed earlier, this scheme is very popular among income tax payers. Many people might not be aware of such scheme that offers a safe and convenient way of investing their hard-earned money.
NSC has a defined period I.e, 5 years as per 8th issue.
Rate of interest:
If you are investing in NSC, you will get 7.9% (from 1st July 2019) per annum and it gets compounded annually. However, it is payable after maturity.
Limit in minimum and maximum balance:
A minimum of Rs. 1000/- and in multiples of Rs. 100/- can be invested for NSC. There is no maximum limit for investment. Earlier a certificate was issued and now-a-days (from 1st July 2016), a passbook is issued for the NSC account.
Who can open a NSC account?
Following people can open NSC account in IPPBs and Post Offices
1. On behalf of a minor, one adult can open an account
2. Minors above 10 years of age can open one account
3. A person having unsound mind can also open one account with the help of a guardian
4. A single adult can open an account
5. Joint ‘A’ type account with maximum 3 adults can be opened (In this case, the amount is payable to both)
6. Joint ‘B’ type account with maximum 3 adults can be opened (In this case, the amount is payable to either)
Scope of income tax rebate:
If you are an income tax payer, you might be looking for sources where you can invest and get tax rebate at the same time. NSC is here for you. It comes under section 80C of IT Act. Your NSC deposits qualify for tax rebate, but don’t forget to calculate the total amount of your 80C investments. As per 80C, you can only invest a maximum of Rs. 1,50,000/-.
Transfer of NSC from one person to another:
Yes, this is possible. NSC after opening can be transferred to another person only once from the date of opening to the date of maturity. In this case, the old name will be rounded up by the post office and the new holder name will be written on the passbook while following other procedures and formalities.
How money grows through this investment?
Though there is a rate of interest 7.9% is paid for the NSC, you might be looking for a real calculation that shows your money growing and after 5 years this much you are getting against your investment from this scheme. Let’s have a calculation for worth of Rs. 70,000/-