New 10-year NSC to fetch 8.7 per cent,compounded half-yearly

The government notified the new 10-year National Savings Certificate (NSC) that will fetch 8.7 per cent interest per annum compounded semi-annually.

The government on Tuesday notified the new 10-year National Savings Certificate (NSC) that will fetch 8.7 per cent interest per annum compounded semi-annually.

According to the notification,on investment of Rs 100,the depositor will get Rs 234.35 on maturity of the certificate,which will be available in the denominations of Rs 100,Rs 500,Rs 1,000,Rs 5,000 and Rs 10,000. There is no upper limit ,however,for investment in the certificate.

The scheme will come into effect from December 1,2011.

The certificate can be transferred from a post office where it is registered to any other post office and it can be pledged as a security.

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The notification comes in wake of the decisions taken by the government on the basis of the recommendations made by the Committee for Comprehensive Review of National Small Savings Fund (NSSF). The committee headed by the then deputy governor RBI,Shyamala Gopinath,had suggested reducing the maturity period for Monthly Income Scheme (MIS) and NSC from 6 years to 5 years.

While Kisan Vikas Patras (KVPs) were to be discontinued,the annual ceiling on investment under Public Provident Fund (PPF) was increased from Rs 70,000 to Rs 1 lakh. The interest on loans obtained from PPF was also raised to 2 per cent per annum from the existing one per cent.