Learn Everything About NSC Maturity

The Indian Government has introduced many investment schemes, each catering to the needs of sometimes diverse and sometimes specific income groups. Among various such schemes, the National Savings Certificate is one worth mentioning.

The National Savings Certificate, issued by the Government of India, is a low-risk and fixed-income investment scheme with an attractive interest rate. Backed by the government, the plan has a maturity tenure of 5 years and offers guaranteed interest and complete capital protection. This feature makes it an ideal investment option for those looking for low-risk short-term returns. In addition, the maturity amount is tax-free under section 80C, making NSC one of the most lucrative tax-saving investment instruments. 

This article will explore various aspects of the NSC maturity tenure to help you understand the scheme in more detail.

NSC Maturity Period

Like any investment scheme, the National Savings Certificate also has a fixed maturity period. The NSC maturity period is five years under the VIII issue. You can buy the NSC certificate in denominations ranging from Rs. 100 to Rs. 10,000. The minimum investment amount is Rs. 1000 and thereafter in multiples of Rs. 100. There is no maximum limit on the number of National Savings Certificates you can buy. 

Mode of Payment on Maturity

On maturity, you can either encash the NSC maturity amount in hard cash or have the maturity amount credited to your savings bank account. 

If the maturity amount is up to Rs. 20,000, you will receive it in cash. On the other hand, if the maturity amount exceeds Rs. 20,000, you will be paid via a cheque.  

To encash the certificate after the expiry of the maturity period, you need to do the following:

• Visit the concerned bank or post office where you purchased or registered the certificate.
• Fill out a redemption request form and submit it to the concerned authority, along with documents such as the original NSC certificate, the NSC passbook and ID proofs like the Aadhaar or PAN card.
• Once you submit the required documents, your request will be processed, and the NSC maturity amount will be credited to your bank account. 

NSC Maturity Value

National Savings Certificates come with a maturity period of 5 years. The current rate of interest of NSC is 6.80%, compounded annually. 

The interest rate, however, is revised by the government of India every quarter. Because of these quarterly revisions, an interest rate chart is published for every financial year.

You can access the NSC maturity value chart online. The table given below shows the rate of interest from 2018 to 2022.

Let us understand how the National Savings Certificate maturity amount is calculated with the help of an example.

Suppose you purchase an NSC worth Rs. 15,000 in 2022. This certificate has a maturity tenure of 5 years and an interest rate of 6.80%. At the end of 5 years, you are entitled to receive a maturity amount of Rs. 20,842. Hence, the interest on your NSC after maturity will be Rs.5,842.

You may also use an online National Savings Certificate calculator for quick results. These calculators are auto-set to 5 years. You must enter the principal amount and then select the interest rate cycle, i.e., annual or half-yearly. Once you have entered the information, the calculator will calculate the interest and maturity amount.  

One of the most exciting features of NSC is that on maturity, the principal amount you receive will be tax-free. However, the interest accrued on NSC after maturity is taxable under the “Income from Other Sources” category. 

Final Thoughts 

The National Savings Certificate is an attractive investment scheme suited for small and mid-income investors. Since the government of India backs it, the scheme has a low-risk profile. Besides tax-saving benefits, another advantage of NSC is that it can be used as collateral to secure loans.

Moreover, it is always advisable that you do not invest your surplus money in a single investment scheme, as no investment is perfect. So, now that you have a fair idea of the National Savings Scheme, you can invest in it to diversify your portfolio. 

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