Premature closure of Bank Term Deposit Scheme 2006

s kumar (senior manager)     25 November 2020

Bank term deposit 2006 under section 80C. The deposit should not be closed before completion of 5 years. Interest is taxable. However, in the event of the death of the first holder of the deposit in a case of a joint holder type deposit, the other holder of the deposit shall be entitled to encash the term deposit before its maturity by making an application to the branch manager of the bank, supported by proof of death of the first holder of the deposit. 

The question is in the above case, whether the nominee or legal heir is entitled for interest for the period the deposit remained with Bank ? Whether the Bank is justified if the bank has paid only deposit amount without interest for the lapsed period to nominee or legal heir?