National Savings Certificate: Are you eligible to invest in NSC, what is interest rate? Know all here

With stock markets on rocky road, small savings schemes seem to be a better option for now, even after the latest rate cut. Backed by the Indian Government, the scheme us available at all NSC post offices and encourages investors to deposit small amounts and avail tax benefits of the invested amount. Since the scheme is encouraged by the Indian Government, the risks of investing in the scheme are low.

Who can invest in NSC?

- Any Indian citizen can invest in this scheme. 

- There is no age limit for purchasing the certificate. 

- Non-resident Indians cannot invest in NSC

- Investments can be made with another adult or individuals can buy an NSC on behalf of a minor.

- Under NSC VIII Issue, HUFs and Trusts are not eligible to invest in the scheme. 

What are current interest rates on NSC?

The government has recently reduced National Savings Certificate interest rates by 110 bps. For the current fiscal between April and June, you will get an interest rate of 6.8 per cent on National Savings Scheme. The interest that is generated from the scheme is calculated on a yearly basis.

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What are the benefits of investing in NSC?

Apart from the returns, you also get tax benefits for investing in NSC. The two maturity periods of the scheme are 5 years and 10 years. Under the scheme, tax benefits of up to Rs 1.5 lakh are provided. 

In case you need urgent money, loan can also be availed against the amount available in the account. Except for the interest that is earned in the final year, the remaining interest that is generated is tax-free.

The interest that is generated is compounded on a yearly basis and reinvested towards the scheme.