Premature closure of an account shall be allowed on an application by the account holder in Form-4, subject to the following conditions, namely:-
(a) no deposit shall be withdrawn before the expiry of six months from the date of deposit;
(b) where a deposit in a one-year, two-year, three-year or five-year account is withdrawn prematurely after six months, but before the expiry of one year from the date of deposit, interest shall be payable to the account holder at the rate applicable to Post Office Savings Account for the completed months;
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(c) where a deposit in a two-year, three-year or five-year account is withdrawn prematurely after the expiry of one year from the date of deposit, interest on such deposit shall be payable to the account holder for the completed years and months, commencing on the date of deposit and ending with the date of withdrawal, and such interest shall be calculated at the rate which shall be less by two per cent. points than the rate specified for a deposit of one-year, two-year or three-year, as the case may be and interest for the completed year shall be calculated on quarterly compounding basis in accordance with the provisions of paragraph 7, and for any part of a year, interest shall be payable as per provision of sub-paragraph (b):
Provided that if a five year Time Deposit account is closed after four years from the date of deposit, rate admissible for three-year Time Deposit account shall be applicable for calculation of interest under this paragraph;
(d) any interest already paid on the deposit under paragraph 7 shall be recovered from the amount of repayment of deposit and the interest payable under this paragraph.