Post Office National Savings Certificates: How To Invest, Annual Return And Other Details

India Post under the Department of Posts provides a range of banking and remittance services. With a network of more than 1.5 lakh post offices across the country, India Post offers nine savings schemes in designated post offices. The interest rates applicable to these small savings schemes - such as the Post Office National Savings Certificates - are reviewed on a quarterly basis. For the current quarter, which ends on June 30, investment in the Post Office National Savings Certificate savings scheme fetches interest at the rate of 8 per cent (compounded annually), according to India Post's website, indiapost.gov.in. 

Here are five things to know about the Post Office National Savings Certificates (NSC):

1. Eligibility: A single holder type certificate can be purchased by an adult for himself or herself, or on behalf of a minor or by a minor, according to the India Post website. 

2. Investment limit: An investor needs a minimum amount of Rs. 100 in multiples of Rs. 100 to open an NSC account. However, there is no maximum investment limit under NSC.

3. Interest rate: The post office NSC offers a return of 8 per cent, which is compounded annually but payable at maturity. An NSC of Rs. 100 grows to Rs. 146.93 on maturity after five years, according to the India Post website. 

4. Income tax benefit: Deposits in the National Savings Certificate (NSC) also qualify for deduction under Section 80C of the Income Tax Act. 

5. Transfer: The name of the old holder is rounded and that of the new holder written on the old certificate in case of transfer. Therefore, old certificates are not discharged in case of transfer of the NSC certificate from one person to another, according to India Post.