Public Deposit

Premature Withdrawals

    A. Premature withdrawal will be permitted subject to Housing Finance Companies (NHB) Directions, 2010 for deposits and interest paid as follows:

    1. Minimum lock in period - Three months
    2. After three months but before six months-The interest payable shall be 4 percent per annum for individual depositor and no interest in case of other category of depositors.
    3. After six months but before the date of maturity - The interest payable shall be one percent lower than the interest rate applicable to a public deposit for the period for which the deposit has run or if no rate has been specified for that period then two percent lower than the minimum rate at which the Public Deposits are accepted by HUDCO.

    a. Provided that in the event of death of a depositor, the deposit may be paid pre-maturely to the surviving depositor/s in the case of joint holding with the survivor clause, or to legal heir/s with interest at the contracted rate (applicable) up to the date of repayment.

    b. For the purpose of determining the period where the period for which the deposit had run contains any part of the year then, if such part is less than six months it shall be excluded and if such part is six months or more, it shall be reckoned as one year.

    In order to meet certain expenses of an emergent nature which includes medical emergency or expense due to natural calamities/ disaster as notified by the concerned Government /Authority;

    1. ‘Tiny deposits’ may prematurely be paid to individual depositors, at the request of the depositor, before the expiry of three months from the date of acceptance of such deposits, in entirety, without interest.
    2. ‘Tiny Deposit’ means the aggregate amount of public deposits not exceeding Rs 10000/- standing in the name of first sole or first name depositor in the same capacity in all the branches of the housing finance company.

    3. In case of other public deposits, not more than fifty per cent of the amount of the principal sum of deposit or Rs 5 lakh, whichever is lower, may be prematurely paid to individual depositors, at the request of depositors, before the expiry of three months from the date of acceptance of such deposits, without interest; the remaining amount with interest at the contracted rate shall be governed by the provisions of the extant Directions as applicable for public deposits.

    Provided further that in cases of critical illness, hundred per cent of the amount of the principal sum of deposit, may be prematurely paid to individual depositors, at the request of depositors, before the expiry of three months from the date of acceptance of such deposits, without interest.

    B. Conditions for premature withdrawal for depositors availing Tax benefits under section 80C(2)(xvi) (a) of income tax act, 1961:-

    1. The minimum lock in period of five years is fixed for depositors availing tax benefits under section 80C and no premature withdrawal is allowed for such deposits prior to the above lock in period.
    2. in case of joint holding by two or three persons, only the first depositor would be eligible for tax benefit for Section 80C.

    C.As per Housing Finance Companies(NHB) Directions, 2010, the premature withdrawal is, however, at the discretion of HUDCO