NSC: National Savings Certificate is a guaranteed return government scheme. It is a fixed income investment option, which is popular among investors. This 5-year government scheme can be started in post offices across the country. There is no maximum limit for investment in NSC scheme, but under the old tax system, tax exemption is available only on investment up to Rs 1.5 lakh.
If you are a small investor and want to take advantage of the stock market, then the Government Saving Scheme, National Savings Certificate (NSC) is the best scheme for you. You can get guaranteed returns by investing in this scheme. This popular scheme launched by the government in May 1989 is suitable for small investors. NSC account can be opened by depositing a minimum of Rs 1,000 in any post office in the country. The duration of this scheme is 5 years. At present, interest is being given on this saving scheme at the rate of 7.7% per annum. Interest is reviewed every quarter. NSC depositors also get tax under Section 80C of Income Tax.
Tax exemption on investment of Rs 1.5 lakh
There is no maximum limit set for investment in the NSC scheme, but under the old tax regime, only investments up to Rs 1.5 lakh are tax exempt. According to India Post, NSC offers a 7.7% annual compounded interest rate for a period of 5 years. Interest is compounded annually but is paid only on maturity. Once the scheme matures, it cannot be automatically carried forward. That is, to continue investing after the completion of 5 years, the subscriber has to buy a new NSC certificate at the current interest rate.
How to get a guaranteed return of ₹1.34 lakh on an investment of ₹300000 lakh?
NSC certificates are available in denominations of Rs 100, Rs 500, Rs 1,000, Rs 5,000, Rs 10,000 or more. There is no limit on how many certificates you can buy. In such a situation, if you invest Rs 3 lakh in lump sum, then how much guaranteed return will you get in 5 years, let’s know.
- Return on investment of Rs 3 lakh in 5 years
- Lump sum investment: Rs 3 lakh
- Interest rate: 7.7% annual compounding
- Investment period: 5 years
- Maturity amount: Rs 4,34,710
- Interest: Rs 1,34,710
In this way, you can invest Rs 3 lakh for 5 years and get a guaranteed return of Rs 1,34,710.
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