The National Saving Certificate and the Kisan Vikas Patra are government-backed saving instruments. How are they different from each other and which is better for you?
What is a National Savings Certificate (NSC)?
NSC stands for National Saving Certificate, which is a small savings scheme started by the Government of India. These accounts can be opened at any Post Office across the country.
The main beneficiaries are expected to be people from low to medium-income households. It helps build a habit of disciplined saving all the while saving on taxes. Multiple accounts can be opened by an individual.
The following are the salient features of the savings scheme -
A minimum deposit of Rs.1,000 can be made
Any amount in multiples of Rs.100 can be invested after the minimum amount
There is no maximum limit to the amount that can be invested
KVP stands for Kisan Vikas Patra, and it is also a government-backed savings instrument. This scheme was re-launched in 2014 with new rules. A PAN card would be mandatory for investments above Rs.50,000 and proof of income source would be necessary for investments above Rs.10,00,000.
Some of its salient features are -
A minimum of Rs.1,000 can be made
Any amount in multiples of Rs.100 can be invested after the minimum amount
There is no maximum limit to the amount that can be invested
What are the major differences between NSC vs KVP?
Criteria
NSC
KVP
Minimum Investment
Rs.1,000
Rs.1,000
Maximum Investment
No limit
No limit
Lock-in Period
5 years
Varies
Tax Benefits
Tax exemptions on investments up to Rs.1.5 Lakh
No tax exemptions
Interest Rate
Currently 7.7% p.a.
Currently 7.5% p.a.
Account Transfer
Allowed on some conditions
Allowed on some conditions
Limit of Accounts per Person
No limit
No limit
Premature Withdrawals
Not allowed
Allowed after 2 years and 6 months from account opening
NSC vs KVP - Detailed Comparison
Here is a detailed comparison between NSC and KVP which will help you decide which is a better option for you -
NSC and KVP can be opened by an adult for themselves or on behalf of a minor. A minor above the age of 10 can also open an account for themselves.
Only individual resident Indians can open NSC accounts, trusts are not eligible for this scheme. Whereas, even trusts can open an account under the KVP. When it comes to HUFs and NRIs, they are not eligible for either NSC or KVP.
NSC accounts can be opened in any Post Office across the country, while KVP accounts can be opened in banks as well as Post Offices.
Types of Accounts
The types of accounts are not very different when it comes to NSC vs KVP. Under both schemes, single-holder accounts can be opened by an adult for themselves or on behalf of a minor. A minor who is above the age of 10 can also open a single-holder account for themselves.
Joint accounts can be of two types, and both can be opened by up to three adults. For the Joint ‘A’ Type accounts, the amount is payable to both account holders jointly or to the survivor. In the case of Joint ‘B’ Type accounts, the amount is payable to either of the survivors.
Tenure and Withdrawals
NSC has an investment tenure of 5 years, while the tenure of KVP varies depending on the Ministry of Finance.
While KVP accounts can be encashed after 2.5 years of account opening, NSC doesn’t allow any premature withdrawals. However, both NSC and KVP allow you to pledge the amount to a bank and apply for a loan.
Account Transfer
Both NSC and KVP accounts can be transferred from one person to another in certain circ*mstances. They are -
The death of an account holder in the case of a single-holder account or a joint account
By order of the court
The pledging of account closure by relevant authorities, such as the Reserve Bank of India (RBI), scheduled banks, housing financial firms, local authorities, and others
Conclusion
The government of India has started many schemes for saving for your retirement. The National Savings Certificate and Kisan Vikas Patra are two such safe schemes that have almost zero to low risk involved.
You can open accounts under these schemes from any post office or bank in India. The returns are also decided by the government which promises sure and safe returns. The National Savings Certificate is the right choice for you if you are willing to lock your funds for 5 years, and also want to save some taxes.
The Kisan Vikas Patra might be a better choice for you if you want higher liquidity, as you can withdraw your funds after 2.5 years of opening the account. This is a good option if you have already maximized your tax benefits, as the KVP does not offer any tax benefits. The KVP also has higher returns as compared to the NSC.
Apart from this, it depends on your personal preference which you choose. In case you need urgent funds, you can always opt for moneyview instant personal loans. Here you can get loans up to Rs.10 Lakh with minimal documentation. To know more, visit our website or download the moneyview app.
National Savings Certificates, popularly known as NSC, is an Indian Government savings bond, primarily used for small savings and income tax saving investments in India.
is the right choice for you if you are willing to lock your funds for 5 years, and also want to save some taxes. The Kisan Vikas Patra might be a better choice for you if you want higher liquidity, as you can withdraw your funds after 2.5 years of opening the account.
You will not get any tax deductions on your interests or returns. NRIs and the Hindu Undivided Families (HUFs) are not eligible to purchase a KVP certificate. The interest rate of KVP is lower compare to that of Public Provident Fund (PPF), National Savings Certificate (NSC), and Fixed Deposits.
One of the key advantages of investing in NSC is the additional benefit of income tax exemption. Investors can avail themselves of up to Rs 1.5 lakh worth of tax deductions under Section 80C of the Income Tax Act, provided they opt for the old tax regime and invest in this scheme.
Earning potential: Although both options earn interest, NSC generally offers higher interest rates compared to a FD. However, FDs tend to benefit slightly from more frequent compounding (usually quarterly) compared to NSCs' annual compounding. This can lead to a better overall yield over the 5 years.
The 15% Rule states: when the kVp is lowered by 15% the mAs needs to be increased by a factor of 2, and when the kVp is increased by 15% the mAs needs to be multiplied by 0.5 (i.e. divided by 2).
An increase in kVp extends and intensifies the x-ray emission spectrum, such that the maximal and average/effective energies are higher and the photon number/intensity is higher.
NSC has an investment tenure of 5 years, while the tenure of KVP varies depending on the Ministry of Finance. While KVP accounts can be encashed after 2.5 years of account opening, NSC doesn't allow any premature withdrawals. However, both NSC and KVP allow you to pledge the amount to a bank and apply for a loan.
The choice between NSC and PPF depends largely on your financial goals, investment horizon, and tax planning needs: Short-term Goals: If you are looking for a shorter investment period due to upcoming financial needs (like education fees in the next 5-6 years), NSC might be the better option due to its 5-year maturity.
NSC offers 7.7% on a tenure of 5 years for general and senior citizens. SBI offers 6.60% for general citizens and 7.50% for senior citizens on a five-year tenure. HDFC Bank offers 7% for general citizens and 7.50% for senior citizens on a five-year tenure.
One can claim an income tax deduction by investing money in a five-year FD scheme under Section 80C of the Income Tax Act, 1961. The features, benefits, and terms associated with this type of account may not be completely the same as the normal FD accounts.
ELSS funds usually involve moderate to high levels of risks due to investments in equity markets. NSC, being a government backed scheme, involves very low levels of risks and is in fact considered almost risk-free. This investment is recommended to investors who have low risk tolerance.
The National Senior Certificate enables learners to access to a variety of post-school opportunities depending on their performance in Grade 12. The opportunities include entry-level employment, admission to internships, and admission to colleges, universities and other higher education institutions.
Depending on where in the body a radiographer is imaging, the kVp is manipulated so that there are enough photons, both penetrating tissue and attenuating tissue, to produce clinically useful contrast on radiographs. If the kVp is too high, more photons hit the cassette, and the radiograph appears too dark.
Changes in kVp affect radiation dose, exposure, and contrast. Also, the dose increases proportionally with higher kVp. Exposure doubles in intensity for every 15% increase in kVp, whereas contrast decreases with increases in kVp.[11]
Some disadvantages of Potential transformers: These are designed to operate within a specific frequency range and may not provide accurate measurements outside of this range. These PTs are designed to measure high voltages within a specific range and not be suitable for extremely high-voltage applications.
Higher kVp settings result in X-rays with more energy, which can reduce the patient's exposure to radiation and support better image quality. On the other hand, lower kVp settings, while useful for enhancing image contrast, may necessitate a higher radiation dose to compensate for the increased absorption by the body.
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