Are there any penalties for premature withdrawal of NSC?

Yes, there are penalties for premature withdrawal of National Savings Certificates (NSC). While NSC is designed for long-term investment, it does allow you to redeem your certificates before maturity under certain conditions, but this comes with significant drawbacks.

Penalty Details:

1. Withdrawal Before Maturity:
   • If you choose to withdraw your NSC before the completion of its tenure, you may lose some or all of the interest benefits.
   • This means you could receive a reduced amount compared to what you would have earned if you had kept the investment until maturity.
2. Interest Calculation:
   • The interest will be recalculated based on the period of investment, often at a lower rate than what was initially promised.
3. No Partial Withdrawals:
   • NSC does not allow for partial withdrawals; investors must redeem the entire certificate.
   • This could limit your flexibility in accessing funds while still maintaining some of the investment.

Given these penalties, it is advisable to carefully consider your investment strategy before committing to NSC, as early withdrawal can significantly diminish your overall returns. Do make use of an NSC calculator to get to know the maturity amount to make an informed decision.