Post Office’s National Savings Certificate Scheme can give you double benefit. In this, you will get better interest than Tax Free FD and your income tax will also be saved. Know about this superhit scheme.
5-year FD is called Tax Free FD. Many people invest in this FD to save tax. But there is a scheme of Post Office which will save your tax and can also give you better interest than 5-year FD. We are talking about Post Office’s National Savings Certificate, this is also a deposit scheme like FD in which money is deposited for 5 years. Currently, interest is being given in this scheme at the rate of 7.7 percent. Know the special things related to this scheme here.
First know where and how much interest is being given on Tax Free FD?
Post Office – 7.5%
State Bank – 6.5%
Punjab National Bank – 6.5%
Bank of India – 6.5%
HDFC – 7%
ICICI – 7%
You can also invest in NSC in the name of your child
Any Indian citizen can invest in the National Savings Certificate of the Post Office. If you want to open an account in the name of your child, you can do that too. A child above 10 years of age can also buy NSC in his own name. Two to three people can also open a joint account together.
How much can you invest
You can invest a minimum of Rs 1000 in NSC and thereafter in multiples of 100. There is no maximum investment limit. This scheme matures in just 5 years. The interest is compounded on an annual basis and guaranteed returns are available. The interest for 5 years is calculated according to the interest rate applicable at the time of your investment. Even if the interest rate changes in the meantime, it does not affect your account.
Tax exemption is available
Tax exemption is available on the amount deposited in NSC under Section 80C, that is, you can get tax exemption on deposits up to Rs 1.50 lakh every year. However, unlike other schemes, no partial withdrawal is possible before 5 years in this scheme. Meaning, you will get the entire amount at once only after 5 years. Premature closure can also be done only in special situations such as-
On death of one or all the account holders in single or joint account.
On seizure by pledgee being a gazetted officer.
On order of court.
Rules for extension.
If you want to continue NSC for next 5 years even after maturity, then you have to apply for it again. In such a case, it will be considered as a deposit of new date and the benefit of interest on it will also be available as per the interest of new certificate taken on that date.
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