Starting 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. In the next financial year, the interest will be credited only to the account holder’s post office savings account or bank account, Livemint reported.
In case the account holder is unable to link their savings account with any of these accounts, the accrued interest in that case will be paid only through credit in post office savings account or by cheque, reported Livemint.
The department of Post confirmed 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.
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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.
For the purpose of withdrawal of interest, investors can avoid filling up of multiple withdrawal forms for each of these schemes.
Also, depositors can avail the facility of auto credit of interest from their post office accounts to recurring deposit accounts.
Linking Post Office Savings Account
The account holder needs to submit SB-83 Form.
Linking the bank account
In case of bank account, the account holder needs to 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 they desire to get the interest amount credited.