You can encash a National Savings Certificate (NSC) at the post office or bank where it is held. An NSC matures five years from the date of deposit. It can't be encashed before that, except when the holder dies, a court orders it, or a pledgee forfeits it.
To encash a National Savings Certificate (NSC), take these with you:
- Your NSC passbook or e-certificate (or, for an old paper NSC, the original certificate)
- The holder's proof of identity (for example, Aadhaar, a valid Indian passport or an Indian driving licence)
- The application for closure of the account (Form-9 of the common small savings forms)
- If the NSC was bought on behalf of a minor who has since become an adult, that person applies and signs themselves.
The maturity amount is usually paid into your savings account. If you'd rather encash at a different post office, you can first have the NSC transferred there.
For an NSC bought at 7.7% (the rate since April 2023, still in force for October to December 2026), Rs 1,000 grows to about Rs 1,449 at maturity.
Encashing a National Savings Certificate (NSC) after the holder's death
If the holder of a National Savings Certificate (NSC) dies and no nomination is in force, the heirs can claim with probate of the will, letters of administration of the estate, or a succession certificate under the Indian Succession Act, 1925. If none of these is produced within six months of the death and the amount is up to Rs 5 lakh, the post office can pay the rightful claimant on the basis of a death certificate, an affidavit, a letter of disclaimer and a bond of indemnity. Above Rs 5 lakh, a succession certificate is needed.
If a nomination is in force when the holder dies, the nominee or nominees can, at any time before or after the certificate matures:
- encash the certificate, or
- continue it until maturity as if they had bought it themselves (up to three surviving nominees or legal heirs can do this).
The surviving nominee or nominees apply to the post office where the NSC is held (Form-11 is the claim form), with proof of the holder's death and of the death of any nominee who has died.
If there is more than one nominee, the money is split in the shares the holder specified, or equally if no shares were given.
Income tax on encashment of National Savings Certificate (NSC)
Interest on a National Savings Certificate (NSC) is taxable each year as it accrues, even though you receive it only at maturity. No tax is deducted when the maturity value is paid out.