At a time when there are global uncertainties amid the COVID-19 pandemic and the Russia-Ukraine war, stock markets are volatile and investors are also looking at safe investment avenues. These include national savings certificates, fixed deposits, public provident fund, and bonds, among others.
What are National Savings Certificates?
It is a fixed income investment scheme that can be availed from post offices. It is currently offering an interest rate of 6.8 per cent per annum. This scheme is part of small savings schemes whose interest rates are revised every quarter as per changes in the bond yields. The NSC was floated for small and middle-income level investors as a secure and low-risk investment.
What Are The Eligibility Conditions?
A minimum investment of Rs 1,000 is required for National Savings Certificates. Thereafter, further investment in the multiple of Rs 100 can be made. There is no maximum limit on deposits under the scheme.
— A single-holder type account may be opened by an adult for himself or on behalf of a minor.
— A single-holder type account may also be opened by a minor on attaining the age of 10 years.
— Joint ‘A’ Type account may be opened by up to three adults payable to both the holders jointly or to the survivor.
— Joint ‘B’ Type account may be opened by up to three adults payable to either of the survivor.
— Loan facility available by pledging with the banks.
— As per rules, the transfer of an account opened on behalf of a minor or a person of unsound mind shall not be permitted under this rule unless the guardian of the minor or the person of unsound mind, as the case may be, certifies in writing that the minor or the person of unsound mind, as the case may be, is alive and that the transfer is for the benefit of the minor or the person of unsound mind.
Recently, the government kept the interest rates on small savings instruments, including the National Savings Certificates, unchanged for the April-June quarter. The rate on NSC has been fixed at 6.8 per cent for now. Interest rates on small saving schemes are reviewed on a quarterly basis. The revision happens in line with the movement in benchmark government bonds of similar maturity. Here’re the current rates on various small savings instruments.
Interest Rates As Compared With Fixed Deposits
HDFC Bank, Axis Bank and Kotak Mahindra Bank recently hiked their interest rates on fixed deposits of various tenures and amount of deposits.
For fixed deposits below Rs 2 crore, HDFC Bank now offers interest rates in the range of 5.1-5.6 per cent, depending upon the tenure and borrowers’ profile. Different interest rates are offered to different profiles like women, senior citizens, etc.
For deposits above Rs 2 crore, Axis Bank now offers interest rates in the range of 4.45-4.65.
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