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Should you strive to get this Certificate?

Safe Investments make up a very important portion of your investment portfolio. One of the examples of a safe instrument is a National Savings Certificate. Let us find out more about it.

In order to maximize your wealth, you need to invest in many financial instruments. For an investor, it is vital to make a well-balanced investment portfolio. One should ensure that investments are made in both safe and volatile instruments. Safe instruments offer you the security and steady returns, whereas volatile instruments are high risk high return in nature and require a large degree of speculation and market knowledge.

There is a Rule of Thumb in Investing. It says that your age is the percentage of safe investment that you should be making. So, if your age is 22, then 22% of your investing amount should be put into safe instruments, and the other 78% should be used to invest in risky instruments. On the other hand, if you age is 60, then 60% of your savings should be used up in safe instruments, whereas only 40% should be devoted to volatile instruments.

Safe Investments make up a very important portion of your investment portfolio. In case of a market crisis, your volatile and risky investments may cost you; but your safe investments which contain a certain degree of guarantee will continue to fetch you constant returns. One of the examples of a safe instrument is a National Savings Certificate. Let us find out more about it.

What is National Savings Certificate (NSC)?

A National Savings Certificate is a savings bond offered by the Government of India for the integral purpose of small savings and income tax saving investment in India. It forms a part of the postal savings system of Indian Postal Service.

These bonds can be purchased by an adult or a minor. It can also be held jointly between 2 adults. A Trust also has the right to purchase this bond.

Features of National Savings Certificate

Given below are the key features of NSCs:

  • NSC can be purchased at any Post Office in India
  • The Maturity Period of NSCs is 5 years (as opposed to both 5 and 10 years earlier)
  • Minimum investment amount is only Rs. 100, and there is no upper limit
  • The Interest Rate offered is subject to periodic change, as decided by the Ministry of Finance
  • The Principal Investment amount, as long as it is up to an annual amount of 1.5 lakh rupees, makes you eligible to tax savings under Section 80C of The Income tax Act, 1961
  • Interest is compounded annual, but it is paid only at the time of maturity
  • The interest earned is not subject to any TDS (Tax Deducted at Source) deduction

National Savings Certificate’s Modes of Holding

  1. Single Holder Type Certificate– The NSC is held by an individual of his own behalf or on the behalf of a minor.

  2. Joint A Type Certificate– The NSC is jointly held by two individuals, who command an equal share on the amount on maturity.

  3. Joint B Type Certificate– The NSC is jointly held by two individuals, but the maturity amount is paid out to only one of the individuals or investors.

Benefits of Investing in National Savings Certificate

Given below are the advantages of NSCs:

  • Offers a very high interest rate when compared to other safe instruments
  • Poses almost no risk as the bond is backed by the government of India
  • Provides Tax Savings up to a principal amount of 1.5 lakh annually
  • NSCs can be purchased and held in the name of a minor to secure their future
  • Offers a great amount of flexibility to investors since it has a low minimum limit, and no maximum limit


Therefore, with the help of this article, we’ve learnt how important a tool NSC is. It is safe, flexible, and offers high returns. Knowing this, it definitely deserves a place in your investment portfolio.


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