In October 2020, Tarun deposited ₹100000 for a term of three years with Fun Ltd., an unlisted company. Tarun seeks your advice on the following: He has an emergency in August 2021, for which he needs to withdraw the abov

Provisions of the Companies (Acceptance of Deposits) Rules, 2014: Rule 15 of the Companies (Acceptance of Deposits) Rules, 2014 provides that where a company makes a repayment of deposits, on the request of the depositor, after the expiry of a period of 6 months from the date of such deposit but before the expiry of the period for which such deposit was accepted, the rate of interest payable on such deposit shall be reduced by 1% from the rate which the company would have paid had the deposit been accepted for the period for which such deposit had actually run. The company shall not pay interest at any rate higher than the rate so reduced. Application to the given case: Tarun deposited ₹1,00,000 in October 2020 for three years. He wishes to withdraw in August 2021, which is after 6 months but before the completion of the three-year term. Conclusion: Therefore, Tarun will get interest at **1% less than the rate applicable to a one-year deposit** (as the deposit has run for less than one year, and the rule specifies reduction from the rate for the period for which it actually ran), since he is seeking repayment of his deposit before the expiry of its original tenure of three years.