National Savings Certificates, also referred to as NSC, are savings bonds offered under the India Post’s small saving schemes. NSC can be opened by an adult, a minor, and a trust. Further, two adults can jointly purchase NSCs from any Post Office in India.
Latest NSC interest rate
The government sets the NSC interest rates, which are then updated every three months (i.e., quarterly). For the quarter ending September 30, 2022, the NSC interest rate is 6.8%, which is compounded annually. The account will mature on completion of five years from the date of the deposit.
NSC tax benefits
Deposits under NSC qualify for deduction under section 80C of Income Tax Act.
Pledging of NSC
According to India Post, below are the points where you can pledge your NSC account
(i) NSC may be pledged or transferred as security, by submitting prescribed application form at concerned Post Office supported with acceptance letter from the pledgee.
(ii) Transfer/pledging can be made to the following authorities.
-> The President of India/Governor of the State.
-> RBI/Scheduled Bank/Co-operative Society/Co-operative Bank.
-> Corporation (public/private)/Govt. Company/Local Authority.
-> Housing finance company.
Note that as long as the guardian of the minor or the person of unsound mind, as the case may be, certifies in writing that the minor or the person of unsound mind is alive and that the transfer is for the benefit of the minor or the person of unsound mind, the transfer of an account opened on behalf of a minor or a person of unsound mind shall not be permitted under this rule.
Is premature closure allowed
NSC cannot be closed early before 5 years unless the following conditions are met:
?(i) On the death of a single account, or any or all the account holders in a joint account
(ii) On forfeiture by a pledgee being a Gazetted officer.
(iii) On order by court.
When can NSC be transferred from one person to another person
-NSC can be transferred from one person to another person on the following conditions only.
? The sum will be transferred to the legal heirs or nominees, as appropriate, upon the death of the account holder in the event of a single account or at the death of all account holders in the case of a joint account.
According to the court’s orders, the account must be transferred from the account holder to the court or to any other person; upon pledging, the account must be transferred.
A joint account will be transferred in the name of the remaining account holder or account holders, as applicable, in the event that one of the account holders passes away.
Maturity interest payment
The maturity value of an account created with one thousand rupees is one thousand four hundred sixty-two rupees and fifty-four paisa. Any fraction of a rupee that is not exactly one rupee must be rounded up to the closest rupee when determining the maturity value. For this computation, any sum that is fifty paisa or greater counts as one rupee, but any quantity that is less than fifty paisa is ignored.