Post Office Saving Certificates ( NSC and KVP) [Full Details]
Post Office saving certificates are the backbone of our nation's prosperity. It is no exaggeration. Post office saving certificates viz., National Saving Certificate, Indira Vikas Patra (Discontinued Scheme) and Kisan Vikas Patra have been driving people to save their hard earned money since long. Almost every family in India have reaped the fruits of these schemes at least once. Of course there are still crores of people who gain continuously by investing in these schemes.
So, what makes them so lucrative? Let us see the details closely.
Post Office Saving Certificates - National Saving Certificates
No introduction is needed for national savings certificates of India Post. These are the go to saving options of almost all the salaried people who come under the tax slabs. All the investments made in National Savings Certificates or what we shortly call it as NSCs , are completely tax free (Within the limits of course). But the interest earned will attract tax.
NSCs are also widely used as security deposits in businesses. People often pledge NSCs while paying security deposits for various purposes.
The current maturity period of National Saving Certificates is 5 years. It means you will invest a fixed amount in this scheme and you will get a fixed maturity value which is the sum of principle and interest earned.
No premature closure is available in this scheme. Mainly because this scheme offers tax benefits, this scheme is barred from premature closure, to stop the abuse.
All standard saving rules of post office saving schemes apply to this scheme also.
Post Office Saving Certificates - Kisan Vikas Patra
Post Office Kisan Vikas Patra is another form of saving certificate which offers relatively higher returns than that of National Saving Certificates.
But there is no tax exemption benefit in Kisan Vikas Patras. All deposits made in Kisan Vikas Patras are completely taxable. Even the interest earned is taxable.
Unlike NSCs, KVPs can be closed prematurely. But there is a minimum lock in period of 2.5 years. Even if you close this account prematurely there will be minimum loss in the interest earned.
The main attractive point about KVP is that the deposited amount gets doubled after the fixed maturity period. For example, if you invest Rs.200,000/-, you will get Rs.400,000/- after the maturity period.
Currently the maturity period of KVP is 124 months and these rates will continue till 30/06/2021.
Post of Saving Certificates Common Points
How to Open A Post Office Saving Certificate Account
- To open a post office Time Deposit account you have to fill out the prescribed application form and submit it in any post office.
- Along with the application form you also have to submit a copy of your Identity proof and address proof.
- Self attestation ( put your signature on the copies) is necessary for all the documents you are producing for opening of savings account.
- The mode of deposit can either be cash or you can give any bank cheque. If you already have a savings account in any post office you can give a cheque from that account also.
Who can open Post Office Saving Certificate Account?
- Any Indian citizen can open a post office saving certificate account. Provided they are not currently residing in any country other than India.
- A saving account can be opened all individuals above 18 years which can be operated by themselves.
- For all the individuals who are below 18 years, the account will be managed by guardians( mother /father or legal guardian)
- Grandfathers /Grand mothers can also open the account on behalf the minors but the encashment can only be done mother/father/ legal guardian of the minor.
Who can operate Post office Saving Certificate account?
- Post office saving certificate account can be operated by 1. Self if the account is a single account, 2. Up to 3 Account holders if the account is either a Joint A or Joint B account.
- Guardian ( Mother/Father or legal guardian) in case of an account opened in the name of a minor.
Whether Nomination Facility is available?
- Yes nomination facility is available. You can give a nomination at the time of opening of account. You can also change nomination at any time.
Whether The Certificates can be pledged as security?
- Yes , the certificates can pledged by paying the prescribed pledge fee of Rs.100/-+GST. A pledge application form is to be filled out for the purpose.
So these are the important details about post office saving certificates you ought to know before investing.
If you have any more doubts feel free to ask your doubts by commenting below and we will be happy to help you.
Cheers.