After spending several years in the doghouse, this popular tax-saving instrument is back in the limelight. While banks have cut interest rates on tax saving FDs, small savings schemes (including NSCs) have been spared.

At 8%, the five-year NSCs are offering close to 75-100 basis points more than what fixed deposits give. Also, unlike PPF and SSY, the interest rate of the NSC does not change if rates are cut. What’s more, the interest earned on the NSC is also eligible for deduction under Section 80C in the following years. “The tax benefit on the interest effectively makes it tax free for investors who may not have hit the annual ceiling of Rs 1.5 lakh under Section 80C,” says investment and tax expert Balwant Jain.

Smart tip : Instead of tax-saving fixed deposits, use NSCs to save tax and earn a higher returns at lower risk.

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So, join mutual fund investment or tax saving schemes under our guidance at earliest to grow your investment along with peace of mind. The earliest you start investing, more compounding growth you will have in future.