The Government of India, have launched a new 10 year National Saving Certificate (NSC) with effect from 1 December 2011. Investment under this new small saving scheme will offer 8.7% pa interest which will be compounded semi annually.
10 Year National Saving Certificate scheme has been designed to offer high rate of return on a fixed period of 10 years. Lets have a look at the major highlights of this scheme:-
- Investment under 10 year NSC will offer 8.7% pa interest (compounded semi annually) which means if an investor make an investment of Rs 100 under this scheme then he will get Rs 234.35 at the time of maturity.
- Investors can invest under this scheme in the denomination of Rs 100, Rs 500, Rs 1000, Rs 5000 and Rs 10,000.
- There is no maximum limit on investment under this scheme.
- NSCs are transferable which means investor can transfer his NSC to someone else or can get it transfer from one post office to another.
- National saving certificate can be used as collateral security to get loan from bank.
- There is no tax deduction at source (TDS) on investment under NSC.
- Risk free investment.
- Interest from NSCs is exempt from tax up to a limit of Rs 1 lakh under section 80 C of the Income Tax Act 1961.