The Post Office’s National Savings Certificate (NSC) scheme is safer and more profitable than FDs and RDs. Invest just ₹9 lakh and earn ₹13 lakh in 5 years. With its tax exemptions and guaranteed returns, it’s becoming a top choice for investors.
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Post Office’s Savings: The Post Office’s National Savings Certificate (NSC) scheme has always been considered a safe and reliable investment that offers good returns. So, if you have a lump sum of money, such as from retirement or the sale of land, this scheme could be a great fit for you. If you deposit ₹9 lakh in NSC, you could receive over ₹13 lakh after 5 years. So, let’s understand what this scheme is, how it works, and its benefits.
What is the NSC scheme?
The National Savings Certificate (NSC) is a government-backed savings scheme available at post offices. It’s believed to be specifically designed for small and medium-sized investors. You can start investing with a minimum of ₹1,000, with no upper limit.
This scheme has a 5-year term and offers an interest rate of approximately 7.7%, which increases annually (compounding). Therefore, it is completely safe, as it is backed by the Government of India.
How to invest Rs 9 lakh and earn a return of Rs 13 lakh
So, if you invest a lump sum of ₹9 lakh in NSC, then at an interest rate of approximately 7.7%, you can get around ₹13.04 lakh after 5 years. This will include your principal amount of ₹9 lakh, and the remaining ₹4.04 lakh will come from interest. This means that if you invest ₹9 lakh in a National Savings Certificate, you will receive ₹13,04,130 at maturity after 5 years, of which ₹4,04,130 will be your interest income. This calculation is based on compounding, where your money grows every year. It’s also great for those who are risk-averse and want a guaranteed return.
Benefits of NSC
The NSC scheme has many benefits:
Security:
Since it’s a government scheme, your money is completely safe.
Tax Deduction:
Investing in NSC offers you a tax deduction of up to ₹1.5 lakh per year under Section 80C of the Income Tax Act.
Good Returns:
The interest rate, around 7.7%, is higher than savings accounts or many other schemes.
Flexibility:
You can open an individual or joint account; you can also purchase NSC for your children or family.
Nominee Facility:
You can nominate a family member so they can receive the money after you leave.
Who Can Invest?
Any Indian can invest in NSC. So, you can open an account individually or jointly (with a maximum of three people). In fact, children over the age of 10 can open an account, as can their parents or guardians. You can purchase as many NSC certificates as you like, as there is no upper limit.
How to get started?
Investing in NSC is very easy. You can open an account at your nearest post office. You’ll need your Aadhaar card, PAN card, passport-size photo, and KYC documents. You can deposit funds through cash, check, or online payment. Digital certificates are now available, which you can manage online. After investing, you’ll receive a certificate that can be redeemed after five years.
Understand the Precautions
Keep a few things in mind before investing in NSC:
Lock-in Period:
Your money will be locked in for five years, meaning you can’t withdraw it.
Tax on Interest:
Interest for the first four years is tax-free, but interest in the fifth year may be taxable. Consult your tax advisor for details.
The Post Office NSC scheme is considered a safe and profitable investment option. If you deposit ₹9 lakh, you can earn ₹13.04 lakh in 5 years. This scheme offers tax exemption, good returns, and complete security. Whether you’re planning for retirement or want to safely grow your money, NSC is a great option. (Note: This article is for informational purposes only and should not be construed as investment advice. Consult a financial advisor before making any investment decisions.)
