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.
Post Office 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 National Savings Certificate of Post Office, this is also a deposit scheme like FD in which money is deposited for 5 years. At present, interest is being given in this scheme at the rate of 7.7 percent. Know here the special things related to this scheme.
First know where and how much interest is being received on Tax Free FD?
Post Office – 7.5 percent
State Bank – 6.5 percent
Punjab National Bank – 6.5 percent
Bank of India – 6.5 percent
HDFC – 7 percent
ICICI – 7 percent
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, then you can also open it. At the same time, 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.
How much can you invest?
You can invest minimum Rs 1000 in NSC and thereafter in multiples of Rs 100. There is no limit on maximum investment. This scheme matures in just 5 years. Interest is compounded on annual basis and guaranteed returns are available. The interest rate 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.
Get tax exemption
Tax exemption is available under Section 80C on the amount deposited in NSC, that is, tax exemption can be availed on deposits up to Rs 1.50 lakh every year. However, unlike other schemes, no partial withdrawal can be made in this scheme before 5 years. Meaning, you will get the entire amount at once only after 5 years. Premature closure can also be done only in special situations like-
- On the death of any or all the account holders in a single account or joint account
- On seizure by the mortgagee being a Gazetted Officer.
- On the orders of the court.
Extension rules
If you want to continue NSC for the next 5 years even after maturity, then you have to apply again for it. In such a situation, it will be considered as a deposit of the new date and the benefit of interest on it will also be available as per the interest of the new certificate taken on that date.
