Help on National Saving Certificate

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govkj asked 10 years ago

Hi, I would like to invest in NSC (5 year plan) bonds and I have few questions about it If I purchase a bond say for 10000 rs/- in current month (6/6/2016) and coming month (6/7/2016) I will buy one more bond of worth 10000 and 3rd month(6/8/2016) I will go for 5000 and so, All these bonds (10000+10000+5000) accumulated and matured on same day (The day I purchased my first bond) or first will mature on (6/6/2021), 2nd on (6/7/2021) and 3rd on (6/8/2021) and will Interested calculated for 25000 or individually ? As I cannot go and invest the lump sum amount at the same time hence I have planned for monthly purchasing of bonds. If I proceed with the same plan (like purchasing a bond of worth 10k every month) will my last purchase (i.e., 6/6/2021) will get matured only on next five years (6/6/2026). Kindly provide the clarification as soon as possible, As I am thinking to purchase in couple of days. My goal is to get the lumpsum amount of money after 5 years So is NSC is suitable for me if not suggest any other plan. Thanks in advance.

4 Answers

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Sreekanth Staff answered 10 years ago

Hi, The bonds will mature on respective maturity dates (ie 6/6/2021), 2nd on (6/7/2021) and 3rd on (6/8/2021) ). Yes, the last one will have maturity date of (6/6/2026). May I know the reason for selecting this strategy? Have you shortlisted this investment/saving option for tax saving purpose? If you would like to accumulate certain corpus amount and need it in next 5 years then this strategy may not be suitable.

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govkj answered 10 years ago

Thanks for the response srikanth, Yes I would like to accumulate certain amount for next 5 years. If this is not the correct plan then kindly suggest me the one.
I have PPF (for 5 years)
in my mind can I go with that?

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govkj answered 10 years ago

The reason for this is to save the tax as well as to accumulate some amount for down payment towards home loan in future too.

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Sreekanth Staff answered 10 years ago

Hi, Kindly note that PPF has a lock-in period of 15 years. You may consider investing in tax saving mutual funds ie ELSS Funds. Ex - Franklin Taxshield fund. But kindly understand about ELSS funds and how they work, before investing in them. Kindly read: Best ELSS Funds.