Premature Encashment Rule 16
Are you the holder of any of the government savings scheme like KVP, NSC, MIS or anything else? Than the Premature Encashment Rule 16 is very important for you to understand. Here is the rule.
Sub-Rule: 1 - Notwithstanding anything contained in rule 15 and subject to sub rules (2),(3)and (4), a certificate may be prematurely encashed any time in any of the following circumstances namely:-
(a) On the death of the holder or any of the holders in case of joint holders.
(b) On forfeiture by pledge being Gazetted Government Officer when the pledge is in conformity with these rules; or
(c) When ordered by a court of law.
Sub-Rule: 2 - If a certificate is encashed under sub-rule (1) within a period of one year from the date of certificate only the face value of the certificate shall be payable.
Sub-Rule: 3 -If a certificate is encashed under sub-rule (1) after expiry of one year but before the expiry of three years from the date of certificate, the encashment shall be at a discount. On the encashment of the certificate, an amount equivalent to the face value of the certificate together with simple interest shall be payable. Such simple interest shall be calculated on the face value at the rate applicable from time to time to single accounts under the Post Office Savings Account Rules, 1981, for the complete months for which the certificate has been held. The difference between the aforesaid simple interest and the interest accruing under rule 15 shall be deemed to discount.
Understand the above rule so that it can help you to understand the premature encashment of your certificate.