Know in detail about NSC and KVP (Typical Image)
The interest rate in KVP and NSC is almost equal, so the question arises as to which scheme would be better to open an account. It will depend on when the account is being opened and when the investment is being made.
National Saving Certificate (NSC) and Kisan Vikas Patra (KVP) are schemes run by the post office. Both these schemes are backed by the central government, so there is a guaranteed return on investment. Both these schemes have their own advantages, on the basis of which people should invest. Where NSC matures in 5 years, KVP gets maturity at 10 years 4 months. In both the schemes, the interest rate is fixed in advance, on the basis of which the maturity amount is received.
The interest rate in both these schemes is almost equal. Because of this, there is confusion among people as to when NSC and when KVP scheme should be taken. The interest rate on NSC is getting at 6.8 and on KVP at 6.9 percent. If both the policies are taken through an agent, then he gets a commission of 0.5 percent on the policy. If you take the scheme directly from the post office, then the full amount will have to be paid. If you take this policy after talking to the agent, then he can give you a discount of 0.25 percent. No TDS is deducted from the post office on both the schemes. While there is no benefit under section 80C in KVP, tax benefits can be availed under section 80C in NSC.
who benefits how much
Both the schemes are opened for a long period. If you want to withdraw money ahead of time, then NSC and KVP have different rules. The rules for withdrawing money or premature closure in NSC are strict and almost never happen. If the account holder dies, then in that case pre-mature withdrawal can happen. In NSC, money can be transferred in the name of the nominee. That is, the certificate can be transferred in someone else’s name.
Withdrawing money prematurely from KVP is a little easier. If there is a single account then the entire amount can be withdrawn on the death of the account holder. If there is a joint account, then money can be withdrawn on the death of one of the holders. If you want, you can withdraw your money from KVP after 2 years 6 months. For this you will have to pay a fine.
what to invest in
The interest rate in KVP and NSC is almost equal, so the question arises as to which scheme would be better to open an account. It will depend on when the account is being opened and when the investment is being made. According to experts, the interest rate is currently running at the lowest and the chances of it going down in future are negligible. It is believed that from the end of 2021 or the beginning of 2022, the interest rate will start increasing again.
Experts say that if the interest rate is low, then money should not be invested in the scheme where the amount is blocked for a long time. If you take the scheme now, then the scheme will be fixed according to the current rate and now the rate is at a lower level. From this perspective, KVP can be a less profitable deal as the investment there is for more than 10 years. At present, NSC is better as it gets maturity in 5 years.
who will get how much return
If you invest Rs 1,000 now in NSC, you will get Rs 1389 after 5 years. If you invest Rs 1 lakh then you will get Rs 138949 on maturity. If you invest Rs 1.5 lakh, you will get Rs 208423.5 lakh. If you take NSC of 5 lakhs then you will get Rs 694745. If you deposit Rs 1,000 in KVP and do not break the scheme for 30 months, then you will get almost double i.e. Rs 2,000 on maturity. If you break KVP after 5 years, you will get Rs.1332 out of 1,000. Low interest is being available now, so if you want to invest for a longer period, then a fixed deposit of a bank better than KVP or NSC can be a good option. Here you will get good interest on FD for 1-3 years.
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