Post Office NSC Scheme: If you want to save for 5 years, then you have many options. The most popular of these are Fixed Deposit FD and National Savings Certificate ie NSC. In most banks on 5 years FD where you get up to 7.5% annual interest. On the other hand, you get up to 7.7% interest in the post office NSC, on which no TDS is deducted.
You get tax benefits with lock-in here in 5 years of investment. Here we are telling you about these schemes. So that you can invest by taking the right decision according to yourself.
National Savings Certificate (NSC)
Investment can be started from Rs 1000 in this post office scheme. After this you can invest in multiples of Rs 100 ie Rs 1100, 1800, 2300 or Rs 15100. It does not have any maximum limit.
In this scheme, your money is compounded like FD. This means, the amount of interest earned on the deposited amount in a year, is added to your deposited amount and again counts as the principal amount. It is given simultaneously at the time of maturity.
No extension is available in this scheme after 5 years. That is, if you want to continue it even after 5 years. So you will have to buy new NSC at the prevailing interest rate. His time-limit will also be 5 years only. In this scheme, the interest rate applicable at the time of purchasing the certificate remains the same for the next 5 years.
Fixed Deposit (FD)
Apart from banks, the option of FD is also available in the post office. Whose time limit ranges from 7 days to 10 years. Investing in it for 5 years is a popular option. Up to 7.5% interest is available in this.
Fixed Deposit (FD) v/s National Savings Certificate (NSC)
| FD v/s NSC | Fixed Deposit (FD) | National Savings Certificate (NSC) |
| income tax rules | Tax exemption under section 80C of the Income Tax Act on investments up to Rs 1.5 lakh | Tax exemption under section 80C of the Income Tax Act on investments up to Rs 1.5 lakh |
| TDS rules | 10% TDS is deducted on the interest of more than 40 thousand rupees (Senior Citizen 50 thousand rupees) annually in FD. | TDS is not deducted in NSC. |
| Withdrawal before maturity | No option before 6 months. After 6 months, before 1 year, interest will be available according to the savings account. After 1 year, before 5 years, up to 2% less interest will be available. | Death of account holder, death of both the account holders in case of joint account or on any order of the government or court |
| loan terms | The deposit amount can be used as collateral for the vehicle loan, home loan or any other secured loan. | The deposit amount can be used as collateral for the vehicle loan, home loan or any other secured loan. |
| interest rate | 7.5% maximum for 5 years | 7.7% for 5 years |
