India's Post Offices Manage Investment Scheme of National Savings Certificates

All the post offices play a vital role in handling various types of investments of the people in India. The workload of the post offices have reduced considerably in the recent past as people have almost stopped writing letters to their friends and relatives due to facilities like phones, e mail and faxes. The government of India switched over the role of post offices as the investment centers successfully in India. I am going to cover the main features of the National Savings Certificates scheme, the most popular investment scheme, handled by the post offices in India. Almost all the common people have their money invested in these certificates. The scheme is open for investment for all the Indian citizens, even to the USA residents having green cards.

The scheme offers the interest of 8% annually and the money is to be invested for 6 years on cumulative basis. The cumulative amount is paid back to the individual after 6 years of the investment. There is no facility to get monthly payment of the interest in this scheme. So, if you have money that you are not going to need for the period of next 6 years, then this is the most ideal scheme for you. The National Savings Certificates are issued in the denomination of Rs.100, Rs.500, Rs.1000, Rs.5000, and Rs.10000. The original amount of Rs.1000 becomes around Rs.1600 after a period of 6 years. You shall need to fill in the small form and deposit the money either by check or the cash to the post office, where you want to make the investment. The post office shall issue the certificates within around 3 to 4 days of submitting the form and the payment. It is better to invest in this scheme through approved post office agents, which are nominated by the government of India. These agents will pay you the additional half a percent cash incentive of the total investment made. The agents are paid 1% of the investment as commission by the government of India towards the encouragement to the people for investing in this scheme. One more benefit of this scheme is that the amount invested in this scheme up to limit of Rs.100000 is considered income tax free by government of India under the clause 80C of the income tax act of India. However, the portion of interest that you get at the time of maturity is considered taxable as per the income tax laws of India. There is no maximum ceiling of investment in this scheme. However, income tax benefit is not given above the investment of Rs.100000. The investment can be made in the joint names with various payments options like jointly, either or survivor etc. The nomination facility is also available in this scheme to an adult person having age more than 18 years. If a minor person is nominated, the nomination is to be made in the name of some adult friend or relative till the actual nominated minor person attains the age of 18 years.

These certificates are also accepted by all the nationalized banks towards issuance of cash loans to the individuals, amounting to around 80% of the value of the certificates. Such certificates are kept by the bank as a security and the loan payment is made to the individual. These certificates can also be renewed or encashed even in your absence on the basis of the authority letter through the help of your friends/relatives and the government approved agents of post office. When there are so many benefits available in this scheme, why not to invest in it if it is feasible for you to invest money in India?