There are numerous benefits of the National Savings Certificate due to which the scheme has gained popularity among the masses. Enlisted below are some of these benefits:
Small Investments – The investment required in this scheme is extremely minimal. It starts at ₹ 1,000 and has no upper limit. Moreover, since this scheme is a one-time payment scheme, you don’t have to worry about multiple payments. Just a single lump-sum investment is all that is needed.
Lucrative Interest Rates – Although NSC works similar to an FD, the interest rates are definitely higher than an FD; hence making it a better investment choice.
Power Of Compounding – During the lock-in period of 5 years, any interest earned annually gets compounded and reinvested. So in the next year, you earn interest on that amount as well getting you double benefits.
Guaranteed Returns – In this scheme, you get guaranteed returns at the end of your maturity period of 5 years. This includes your entire corpus along with all the interest earned over the years.
Tax Benefits – As this is a government-backed tax-saving scheme, the entire amount invested in an NSC qualifies for a tax rebate under Section 80C of the Income Tax Act. However, this comes with an annual cap of ₹ 1.5 lakh.
Acts As Loan Collateral – Several Banks and NBFCs accept your NSC as collateral or security for secured loans. All you need to do is get your Postmaster to put a stamp on your certificate and transfer it to the bank.
Easy Transfer – Transferring your NSC from one post office to another is extremely easy. Similarly, you can also transfer your NSC from one person to another. In this case, the initial owner’s name will be rounded off and the new owner’s name will be added.
