Post Office Savings Scheme Interest Rates: The government has recently said in an order that the interest rates of various small savings schemes including National Savings Certificate (NSC), Senior Citizens Savings Scheme and the Public Provident Fund (PPF), will remain unchanged for the July-September 2022 quarter even as inflation rates remained high in the country. This is the ninth consecutive time that small savings scheme interest rates have remained unchanged.
What is the National Savings Certificate Scheme?
Among these small savings schemes, the National Savings Certificate is a great option to make risk free savings. This scheme is the most suitable for those who want to invest for a short term of five years and also get tax benefits. While a five-year bank FD rate typically comes at 5.5 per cent interest rates, NSC gives a return of 6.8 per cent. The NSC was floated for small and middle-income level investors as a secure and low-risk investment. Interest rates on small saving schemes are reviewed on a quarterly basis. The revision happens in line with the movement in benchmark government bonds of similar maturity.
National Savings Certificate: Features, Benefits and Eligibility
This post office savings scheme only requires a lump sum amount and monthly contributions need not be paid. The deposits made via the NSC scheme are eligible for deduction under section 80C of Income Tax Act.
A minimum investment of Rs 1,000 is required for opening an account under the National Savings Certificate scheme. Thereafter, further investment in the multiple of Rs 100 can be made. There is no maximum limit on deposits under the scheme. However, the deposit should be made in lumpsum amount.
Here is who can open a National Savings Certificate account
— A single-holder type account may be opened by an adult for himself or on behalf of a minor.
— A single-holder type account may also be opened by a minor on attaining the age of 10 years.
— Joint ‘A’ Type account may be opened by up to three adults payable to both the holders jointly or to the survivor.
— Joint ‘B’ Type account may be opened by up to three adults payable to either of the survivor.
— Any number of accounts can be opened under the scheme.
Maturity: The deposit shall mature on completion of five years from the date of the deposit.
Loan Facility: Loan facility is available under this scheme by pledging with the banks.
NSC Calculator: Get Rs 80,000 Interest in 5 Years
With an attractive interest rate of 6.8 per cent per annum, deposits of Rs 1000 grows to Rs 1389.49 after 5 years. This means that if someone deposits a lumpsum of Rs 2 lakh after getting their retirement benefits, the interest amount received after five years will be Rs 77,899, which is almost equal to Rs 80 thousand. Therefore, the person will receive around 2.77 lakh in just five years by depositing his or her money in the National Savings Certificate scheme.
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