The Government has discontinued the physical form of NSC. Now NSC will be available in E-mode and you can purchase National Savings certificate online.
Earlier this year government had decided to reset the interest rates of small savings every quarter. So accordingly, from 1st April 2016 onward the government has changed the rates of small savings including NSC and now on wards rates will be reviewed online.
The reason behind quarterly reset of interest rate, as given by the Government are as follows:
- It will help the economy move to a lower interest rate regime and eventually helping the lower income group.
- To alien the interest rates of small savings with the market rates.
- The interest rates of small savings limit the ability of banks to reduce their interest rates which against monetary Policy of RBI.
Quarterly fixation of interest rates leads to online sale of National Saving Certificate. Online sale of NSC is done so that the error of issuing wrong certificate is eliminated.
In case of physical sale of NSC, the government used to issue bulk number of NSC certificates to the Post offices. In turn, the post offices used to sale these NSC certificates to the customers. There were chances of errors in issue of wrong NSC certificates in case there is change in NSC interest rates quarterly. This error cannot occur in case of online sale, since the certificate’s interest rate will get automatically changed.
The government has replaced the sale of NSC in physical form by Sale of NSC in E-mode. But till the CBS system of online sale of NSC put into place, the post offices are allowed to sale the NSC physically recorded on a passbook.
The benefit of National Savings Certificate online mode is that it will be always accessible online and printouts or physically copy can be obtained on demand.
The NSC in E-mode will be issued in two types:
- Exclusive E mode :- The NSC will be viewable in online mode in Form A. Customer can view it online by having internet banking with saving account. Customer will have right to view all time.
- Pass-Book Mode:- Under this mode, the NSC will be printed or entered manually in a pass book. Such pass book is issued by the officials with their signature in blue color.
The goverment has advices to use more “Exclusive E mode” over ” Pass-Book Mode” so that things get online and system go paperless. But the customer can opt for any one of the method.
The passbook mode is eligible for pledging throughout the country form 1st July 2017.
Transfer of NSC in E-Mode can be made as per old rules.
Though the online purchase of NSC is announced but the online system will take some time to replace the physical sale of NSC completely.
I will update this article for any further updates and soon I will provide a link for online purchase of National Savings Certificate.
Please comment on any query on Purchase of National Savings Certificate Online.