If you want to invest money for the long term, but do not want to take any kind of risk, then you can invest in the National Savings Certificate (NSC) of the post office. In this scheme of the post office, you are getting interest up to 7.7%, on which no TDS is deducted. Apart from this, you get many other benefits. 

You get the benefit of compounding

In Post Office NSC, you get the benefit of compounding interest like FD, this makes your money grow faster. Investment in the scheme can be started from Rs 1000, there is no limit on maximum investment.  

Tax Benefits 

Investing in NSC provides tax exemption under Section 80C of the Income Tax Act. However, this exemption is available only on investments up to Rs 1.5 lakh. The interest earned from NSC for the first 4 years is reinvested, hence tax exemption is given. However, after completion of 5 years of NSC, it cannot be reinvested, hence the interest earned is taxed as per the tax slab rate. There is no TDS on the interest amount (TDS Rule in NSC).

How much return will you get on investment of 1, 2 and 5 lakhs

If you invest Rs 1,00,000 in NSC, you will get Rs 1,44,903 on maturity at the rate of 7.7 percent interest. Investing Rs 2,00,000 will give you Rs 2,89,807 and depositing Rs 5,00,000 will give you Rs 7,24,517 on maturity.

Who can open an account

Any citizen can open an account in it. There is also a facility of joint account. Guardians can invest in it on behalf of a minor or a person of unsound mind. Minors above 10 years of age can buy it in their own name. NSC can be transferred from one person to another once between the date of issue and maturity date.

Rules for premature closure

The NSC scheme matures in 5 years. Once you invest in it, the same interest rate which was applicable at the time of investment remains applicable for the entire 5 years. There is no option of premature closure in NSC. It can be closed prematurely only under special circumstances like death of the account holder, death of both the account holders in case of a joint account or on any order of the government or court.  

PC:ZeeBusiness