Home / Money / Personal Finance /  Post offices will stop paying interest on these accounts in cash from 1st April
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With effect from April 1, 2022, post offices will stop paying interest on Senior Citizen Savings Scheme, Monthly Income Scheme and Term Deposit accounts in cash, Department of Post said in a circular. The interest will only be credited only in account holder’s post office savings account or bank account. In case the account holder is not able to link his/her savings account with Senior Citizen Savings Scheme, Monthly Income Scheme and Term Deposit accounts accounts, the outstanding interest should be paid only through credit in post office savings account or by cheque.

The department of Post said that some Senior Citizen Savings Scheme, Monthly Income Scheme and Term Deposit account holders have not linked their savings account (Post Office savings account or bank account) for credit of their monthly/quarterly/yearly interest.

“The interest due in these Senior Citizen Savings Scheme, Monthly Income Scheme and Term Deposit accounts are left unpaid in sundry office account. Further, it has been observed that many term account holders are not aware of annual interest payment of TD Accounts," the circular said. 

For “better control over Post Office Savings Bank operations, promotion of digital transactions, prevention of money laundering activities and as a preventive measure to avoid frauds, the competent authority has decided for mandatory linking of either post office savings account or bank account for crediting of interest payment of Citizen Savings Scheme, Monthly Income Scheme and Term Deposit accounts," the circular said. 

It is to be noted that undrawn interest of Senior Citizen Savings Scheme, Monthly Income Scheme and Term Deposit accounts do not earn any interest. But the interest, if credited in savings account, will earn additional interest

The department of Post has urged Senior Citizen Savings Scheme, Monthly Income Scheme and Term Deposit accounts account holders to link their savings account (either Post Office Savings Account or Bank account) for interest payment.

Also for the purpose of withdrawal of interest, filling up of multiple withdrawal forms for each Senior Citizen Savings Scheme, Monthly Income Scheme and Term Deposit account can be avoided. 

Depositors can also avail the  facility of automatic credit of interest amount from their Senior Citizen Savings Scheme, Monthly Income Scheme and Term Deposit  accounts through Post Office Savings Account to recurring deposit accounts.

How to link with Post Office Savings Account

In case of Post Office Savings Account, the account holder shall submit SB-83 Form (Application for availing facility of automatic transfer (Standing Instruction) for linking of Senior Citizen Savings Scheme, Monthly Income Scheme and Term Deposit accounts to his PO Savings Account along with his Senior Citizen Savings Scheme, Monthly Income Scheme and Term Deposit accounts passbook for such an endorsement, and his Post Office Savings Account passbook to the post office for the purpose of verifying authenticity.

How to link with Bank Account

In case of bank account, the account holder shall submit ECS-1 Form (ECS Mandate Form) along with a cancelled cheque or copy of first page of the passbook of the Bank Account in which he desires to get the interest amount credited along with his MIS/SCSS/TD account passbook for such an endorsement at the post office concerned. 

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