National Savings Certificate – How to Invest ?

To grow your money exponentially, you must invest and reinvest it in various investment schemes. However, if you have a low-risk appetite and are willing to invest for a reasonable period, then the National Savings Certificate is what you should consider. Hence, without further ado, let’s discuss – What is NSC?

The NSC is a government-backed savings scheme where you can start by depositing a minimum of Rs. 1,000. However, if you want to invest more, the sky’s the limit, as the scheme does not come with a cap on the maximum investment amount. With a maturity period of 5 years, NSC yields interest at the rate of 7.7%. Moreover, you can get tax deductions under Section 80C of the Income Tax Act, 1961, for investments up to Rs. 1.5 lakhs annually.

You can easily buy your NSC certificates from a post office near you.

That being said, let us give you a walkthrough of the how to invest in National Savings Certificate. 

NSC Application Form

As of today, you cannot subscribe to NSC online. You will be required to visit the nearest Post Office to fill out the NSC application form and submit it to the executive in order to open an NSC account.

If you are considering investing in NSC, firstly, you need to apply via NC – 71 form. This form is known as Form 1 or Form A, interchangeably. You can get the form by visiting your nearest post office.  

You must fill in the correct details and submit the filled-out application at the post office. Some basic information about the NSC investment must be provided, such as the investor’s name, the amount to be invested, mode of payment, i.e., cheque or cash and nominee details.

Besides account opening, forms must be filled and submitted for various reasons throughout the plan’s tenure. Listed below are NSC forms used for different purposes:

Eligibility Criteria and Document Required to Open Account

Now, let us consider the eligibility criteria for opening an NSC account.

NSC certificates can be purchased by any adult who is a citizen of India in their name.

• Certificates can be purchased on behalf of a minor by their legal/natural guardian. 
• The applicant must have valid residential and identity Proofs, such as an Aadhar, Driver’s License, PAN card, Voter ID, Passport etc. 
• Non-Residents of India(NRIs) are not eligible to buy NSC. However, if you were an Indian citizen when purchasing the NSC and then moved abroad, you can hold your existing NSC certificate until its maturity. 
• Only individuals are allowed to invest in NSC. Hence, trusts, Hindu Undivided Families(HUF), and other such entities are not eligible to buy NSC. However, a Hindu Undivided Family head(Karta) can purchase an NSC in their name. 

To open an NSC account, you must produce the following documents mandatorily –

• The duly filled NSC application form, also known as Form 1. You also need to mention the amount you want to invest and whether or not you wish to appoint a nominee. 
• Recently clicked passport-sized photograph. 
• Photocopies of your identity proof like Aadhar Card, Passport, PAN card, and such.  
• Photocopies of your address proof like Aadhar Card, Voter ID Card, Passport, electricity and landline bills etc. 
• Cash/cheque deposit of investment amount.

Final Thoughts

The Indian Government has established several investment instruments, from time to time, to help people secure their future. The National Savings Scheme is an excellent example of this. It is an ideal investment option for people who want guaranteed returns on their investment without locking it in a long-term plan. Therefore, the NSC is particularly beneficial for lower or middle-income categories.

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