The National Savings Certificate (NSC) is one of the popular small savings schemes backed by the government. A NSC can be purchased from any general post office across the country. NSC provides guaranteed returns in addition to tax rebates as per section 80C of the IT Act, 1961. NSC VIII (five years) and NSC IX (10 years) offers an interest rate of 8.5% and 8.8% respectively. The interest, under this scheme, is compounded on a half-yearly basis. Owing to tax-saving benefits, regular payouts and easy accessibility, the National Savings Certificate is, therefore, one of the sought-after investment scheme or option for retirement planning in India. The three types of NSC accounts – single holder, joint certificate A and joint certificate B, can be opened in any authorized and head post office in India.
Documentation required to buy a National Savings Scheme certificate
- Original identity proof has to be submitted for verification
- NSC application form (procured from a post office) has to be filled.
- NSC can be purchased with cheque, cash or a demand draft in favour of the postmaster of the post office where you buy your NSC
- Signature of the witness is needed to complete the formalities
- Proof of Identity (driving license, voter id)
- Address proof
- Photograph
Application form for opening a NSC
The NSC application form requires you to fill in the following particulars
- Name of the Account holder
- Cash paid or Cheque no drawn in favour of post master
- Type of account
- Name of the guardian( if applicable)
- Name of the nominee, full address and minor nominee’s date of birth
- Signature of the investor
- Signature of the authorised agent
The post office has to fill in the required details in the application form
- Number of certificates
- Issue price
- Date of encashment
- Postmaster’s initials
- Signature of the postmaster
Documentation required for encashment
There are two kinds of withdrawal or encashment options available for account holders – premature withdrawal and maturity encashment.
- Premature encashment is permitted under the following conditions:
- Court Order
- Death of the holder/holders
- Forfeiture by a pledge (government officer)
- Maturity encashment: The maturity proceeds can be encashed by the account holder after completion of the tenure of the scheme (5 years for NSC VIII and 10 years for NSC IX).
The documents required for encashment are listed below:
- NSC certificate (original)
- NSC encashment form
- Proof of identity (driving Licence, voter ID)
- If NSC is purchased on the behalf of a minor, attestation by a guardian is mandatory. In case of absence of nominees, the legal heir can choose encashment after submitting form SB84. If the account holder dies, the nominee can opt for encashment by submitting two forms – annexure 1, a claim settlement application form (registered at a post office) and annexure 2, a claim settlement application form (legal evidence).