Post Office NSc, KVP schemes

Post Office NSc, KVP schemes fetch a good interest about 7%. What is your opinion about it?

Small Finance Banks provide better rates.

RBI floating rate savings bond (taxable) provide better rate than NSC for an increased lock-in period.

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Don’t know about KVP but NSCs don’t make sense anymore. No liquidity and also returns are taxable under slab. Yes you can get 80C deduction upto 1.5 lakhs but, Debt funds or arbitrage funds are better options for me.

@Anubhav_Sarkar, yes there is liquidity problem in these Post Office investments. Some old retired people still prefer them.

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5-year Term Deposit pays 7.71% annually. No TDS on interest payout.

Premature withdrawal is allowed with penalty though.

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What liquidity problem are we talking here with regard to nsc???

Are these not issued by the pist office and guaranteed by govt? These are deposits placed until maturity. Can u partially close these nsc??

If we close them prematurely then interest rate becomes much less depending on the holding period. Further, it takes time in encashing them. It has to be done physically by going to Post Office. These are the problems or inconveniences.

I did not know we could prematurely encash nsc