Withdraw NSC with in 1-2 years?

[hvkumar]

I have bought NSC for tax saving purpose since 2008. I have invested Rs.50000/- in year 2008 and Rs.55000/- in year 2009. Now I am looking to buy my own flat so wanted to withdraw the above NSC. I have a query – Can I withdraw the above NSC?

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[harry1976]

No premature encashment is permitted in the normal course (only in death cases). Premature encashment in other cases, only applicable after the expiry of three years from the date of purchase of certificate.

[harry1976]

One more point - You have to pay Premature Encashment Penalty (Up to 5% depending on the year in which you withdraw).

[hvkumar]

Thanks for the info. Can I take loan against above NSC? Tell me the procedure of the same.

[harry1976]

Can I take loan against above NSC? Tell me the procedure of the same.

Yes you can. Loan can be taken against the certificates by pledging it to the bank. The bank will have the NSC assigned in its favour and advance a percentage of up to 75% of face value plus the amount of accrued interest till the date of taking the loan.

[CONFUSED]

I have bought NSC for tax saving purpose since 2008. I have invested Rs.50000/- in year 2008 and Rs.55000/- in year 2009. Now I am looking to buy my own flat so wanted to withdraw the above NSC. I have a query – Can I withdraw the above NSC?

Premature encashment is permitted, only on the following three contingencies -
(a) on the death of the holder or any of the holders in the case of joint holders;
(b) on forfeiture by a pledgee being a Gazetted Government Officer when the pledge is in conformity with these rules; or
(c) when ordered by a court of law.

[hvkumar]

Thanks again for answering my query. Is it a good move to take loan from NSC? How easy to take loan on NSC and how much I could get on Rs.1,05,000 (50000+55000) on NSC value? Or go and apply for home loan and leave NSC as it is. Please advice.

[CONFUSED]

It depends upon bank to bank, so please check with your bank. Interest rate normally calculated by using BPLR.
For e.g. Interest Rate = (BPLR - 1.25%)
If BPLR is 12.00% than interest rate for loan would be 10.75%.
*BPLR = Bank Prime Lending Rate

[harry1976]

Thanks again for answering my query. Is it a good move to take loan from NSC? How easy to take loan on NSC and how much I could get on Rs.1,05,000 (50000+55000) on NSC value? Or go and apply for home loan and leave NSC as it is. Please advice.

The interest cost on loan would be more than the return, so the better option would be to take premature encashment if possible.