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Post Office Scheme: 5 year FD is called tax free FD. Many people invest in this FD to save tax. But there is a scheme of Post Office which will save your tax and can also give you better interest than 5 year FD. We are talking about the National Savings Certificate of the Post Office, this is also a deposit scheme like FD in which money is deposited for 5 years. At present, interest is being given in this scheme at the rate of 7.7 percent. Know here the special things related to this scheme.
First know where and how much interest is being received on tax free FD?
Post Office – 7.5 percent
State Bank – 6.5 percent
Punjab National Bank – 6.5 percent
Bank of India – 6.5 percent
HDFC – 7 percent
ICICI – 7 percent
You can also invest in NSC in the name of your child.
Any Indian citizen can invest in the National Savings Certificate of the Post Office. If you want to open an account in the name of your child, you can also get it opened. At the same time, a child above 10 years of age can also buy NSC in his/her name. Two to three people can also open a joint account.
How much can you invest?
You can invest in NSC with a minimum of Rs 1000 and in multiples of Rs 100 thereafter. There is no limit on maximum investment. This scheme matures in just 5 years. The interest is compounded on an annual basis and offers guaranteed returns. The interest rate for 5 years is calculated as per the interest rate applicable at the time of your investment. Meanwhile, even if there is a change in the interest rate, it does not affect your account.
get tax relief
Tax exemption is available on deposits in NSC under Section 80C, that is, tax exemption can be availed on deposits up to Rs 1.50 lakh every year. However, unlike other schemes, no partial withdrawal can be made before 5 years in this scheme. Meaning, you will get the entire amount at once only after 5 years. Premature termination can also be done only in special circumstances like-
- On the death of any or all the account holders in a single account or joint account
- On seizure by the mortgagee being a Gazetted Officer.
- On the orders of the court.
extension rule
If you want to continue NSC for next 5 years even after maturity, then you will have to apply again for it. In such a situation, it will be considered as the deposit amount of the new date and the benefit of interest on it will also be available as per the interest of the new certificate taken on that date.