All about Investment in National Savings Scheme with investment recommendations

Types of National Savings Scheme

Minimum Deposit

Maximum Deposit

Deduction of Interest u/s

Maximum Deduction Limit

Rate of Interest (till 31.3.2024)

Tenure

Recommended

Post Office Savings Account

Rs. 500

No Limit

80 TTA

Rs. 10,000

4.00%

Not Defined

• No, as inflation rate is much higher than the interest rate
• It should be used for maintain liquidity only as withdrawal can be done at any time.

National Savings Recurring Deposit Account (RD)

Rs. 100

No Limit but should be in multiple of Rs. 10

No Tax Benefit available

6.70%

5 years

• No, as it has low interest rate as it matches to inflation rate only.
• There is no tax benefit available under this scheme
• Also, there is lock in period of 1 to 3 years.

National Savings Time Deposit Account

(Time Deposit)

Rs. 1,000

No Limit but should be in multiple of Rs. 100

80C

Rs. 1,50,000

6.90%

1 year

• Yes, it has high liquidity and better interest with low tenure.
• It can be closed after 6 months.
• However, tax benefit is available only in case of 5-year time deposit.

7.00%

2 Year

7.10%

3 Year

7.50%

5 Year

Nationals Savings (Monthly Income Account) Scheme

Rs. 1,000

Rs. 9 Lakhs in single account

Rs. 15 Lakhs in Joint account

No Tax Benefit available

7.40%

5 years

• National Savings Time Deposit A/c is a better option as compared to this as-
• it has maximum limit and has no tax benefit.
• It has penalty of 1% to 2% in case of premature withdrawal.

Senior Citizen Savings Scheme (SCSS)

Rs. 1,000

Rs. 30 Lakhs

80C

Rs. 1,50,000

8.20%

5 Years

(can be extended to 3 more years)

• Yes, it has low risk rate with high interest rate (more than FD)
• Also, it has tax benefits under Income Tax
• It is recommended to those who are looking for long term investment as this scheme also attracts penalty on premature withdrawals.

National Saving Certificate (VIII issue)

Rs. 1,000

No Limit but should be in multiple of Rs. 100

80C

Rs. 1,50,000

7.70%

5 years

• Yes, as it also has tax benefits and if you are looking for long term investments.
• Individual can get loan by pledging the NSC
• No Premature withdrawal except death/forfeiture by pledgee/order of court.

Kisan Vikas Patra

Rs. 1,000

No Limit but should be in multiple of Rs. 100

No Tax Benefit available

7.50%

10 Year and 4 Months

• Not highly recommended, as other schemes have much extra benefit.

Extra Benefits of KVP

• KVP can be transferred from one person to another and from one post office to another.
• KVP can be encashed after 2 and half years from the date of investment.
• Money Doubles on Maturity.

PPF Scheme

Rs. 500

Rs. 1,50,000

Interest is exempt

10

7.10%

15 Years

• Yes, as withdrawal is permissible after 7th FY.
• Loan Facility is available.
• PPF account is not subject to attachment under any order or decree of a court of law.
• It also provides tax benefit to individual.

Deposit in PPF Account

80C

Sukanya Samriddhi Account (Only for girl child under the age of 10 years)

Rs. 250

Rs. 1,50,000

Interest is exempt

10

8.20%

21 Years

• Yes, as it has highest interest rate which secure the future of your girl child.
• It also provides tax benefit to individual
• Premature withdrawal is available.

Deposit in PPF Account

80C

Mahila Samman Savings Certificate 2023

Rs. 1,000

Rs. 2,00,000

No Tax Benefit available

7.50%

2 Years

• It is limited period scheme for girls without any age limit.
• It is available from April 2023 to March 2025.