Government of India have decide to go digital in issuing NSC (National Savings Certificate) and KVP (Kisan Vikas Patra), which are very popular savings schemes in India.
NSC (National Savings Certificate) is a good saving scheme for low risk appetite investors, which is provided by the India Government through Post offices. And it usually has a maturity period of five to ten years. It is also eligible for tax deduction under Section 80 C. The rate of interest offered on NSC is 8.1%.
KVP (Kisan Vikas Patra) is also a risk free investment scheme which gives a stable income. Under this scheme money doubles in 100 months and interest is compounded annually. This scheme is provided by the Indian Government through post office. Kisan Vikas Patra does not offer any income tax benefits to the investors. However, withdrawals are exempted from Tax Deduction at Source (TDS) upon maturity. The rate of interest offered on KVP is 7.8%.
Earlier both KVP and NSC were issued in the form of pre – printed physical certificates. However, pre – printed physical certificate have been discontinued by the government from July 2016.
Instead of pre – printed NSC and KVP certificate, the certificates will be recorded in two modes i.e. e – mode (electronic mode) or in Passbook mode.
How to buy NSC and KVP Certificates in Electronic mode (e – mode)
Follow the below mention guidelines in order to opt for the certificates in electronic form
You can easily buy KVP and NSC certificate in e – mode if you have a savings bank account with bank / post office.
You are required to have secured internet banking. In case you don’t have a savings account or internet banking, you will have to apply for the both before the purchase of NSC and KVP.
In NSC (National Savings Scheme), the minimum amount you can invest is Rs. 1,000.
In KVP (Kisan Vikas Patra), the minimum amount you can invest is Rs. 100.
NSC and KVP Certificate in Passbook Mode
If you don’t want to purchase the certificates in electronic mode, you can opt for Passbook Mode i.e. you can buy NSC and KVP and the same will be recorded in Passbook manually. Where the official would authorize the passbook with physical signature (in blue ink).
In case a customer wants to shift the mode from Passbook to electronics, he would require submitting his passbook at the post office, where the officials would destroy the passbook after cancelling the pages.
In case you lose your physical NSC and KVP certificate, passbook will be given in lieu of pre-printed NSC or KVP. The old certificate number may be noted in this case, on the passbook issued.
Transfer of KVP/NSC certificates from one post office to another and from one bank branch to another shall continue as per the existing rules and guidelines.
Also, once you have purchased KVP and NSC, it cannot be transferred.
Closure or Pre mature Closure Procedure of KVP and NSC
During the closure, the passbook should be given to the officials and the issued amount will be obtained in the passbook. The officials would cancel all the pages by drawing in red lines followed by dated signatures of authorized official with designation stamp. After that passbook will be torn and preserved as a closed voucher.
List of banks offering KVP and NSC in Electronics and Passbook mode
- Andhra Bank
- Axis Bank
- Bank of Baroda
- Bank of India
- Canara Bank
- Central Bank of India
- Corporation Bank
- Dena Bank
- HDFC Bank
- ICICI Bank
- IDBI Bank
- Indian Bank
- Indian Overseas Bank
- Punjab national Bank
- State Bank of India
- State Bank of Bikaner and Jaipur
- State Bank of Indore
- State Bank of Mysore
- State Bank of Patiala
- State Bank of Saurashtra
- State Bank of Travancore
- Syndicate Bank
- UCO Bank
- Union Bank of India
- Vijaya Bank
Recently, government has decided to cut down interest rates on small savings scheme which also includes NSC (National Savings Certificate) and KVP (Kisan Vikas Patra) by 0.2 percentage points for the January – March quarter. This move has been taken to prompt the banks to lower the deposit rates.