POMIS, SCSS, Time Deposit account holder? Interest payment in cash will not be allowed from this date

Post Office Linked Account: If you are withdrawing interest income earned on post office MIS, SCSS and Time Deposit accounts in the form of cash, you may not be able to do so from April 1, 2022. Government has made it mandatory for the use of Savings Account for credit of monthly, quarterly, yearly interest in case of MIS, SCSS, Time Deposit accounts.

As an investor in small savings schemes such as Monthly Income Scheme (MIS), Senior Citizens Savings Scheme Account (SCSS) or Time Deposit account, one has to compulsorily open a PO Savings Account or a Bank Account. If depositors already have a savings account, it has to be linked to the MIS, SCSS and TD accounts.

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Interest on MIS, SCSS, Time Deposit accounts will be credited only in account holder’s PO Savings Account or Bank Account with effect from 01.04.2022. In case an account holder is not able to link the Savings Account with MIS, SCSS, Time Deposit accounts up to March 31, 2022, the outstanding interest will be paid only through credit in PO Savings Account or by Cheque.

Interest payment in cash will not be allowed from Monthly Income Scheme (MIS), Senior Citizens Savings Scheme Account (SCSS) or Time Deposit account from 01.04.2022.

Under the 5-year Monthly Income Scheme (MIS), interest payment is only on a monthly basis while in 5-years Senior Citizens Savings Scheme Account (SCSS), the interest payment is on a quarterly basis. In a Time Deposit account, the interest payment is only on an annual basis.

Process to link savings account with MIS/SCSS/TD accounts:

Post Office Savings Account: In case of Post Office Savings Account, the account holder can avail facility of automatic transfer (Standing Instruction) for linking of MIS, SCSS, Time Deposit accounts.

The PO Savings Account or Bank Account, in which the interest payment is desired by the depositor of MIS, SCSS, Time Deposit accounts, can be either single account or joint account in which the depositor of MIS, SCSS, Time Deposit accounts should be one of the depositors or guardians in savings account.

Bank Account: In case of Bank Account, the depositor has to submit ECS Mandate Form along with a cancelled cheque or copy of the first page of the passbook of the Bank Account to get the interest amount credited.

Deposits in post office MIS, SCSS, Time Deposit accounts provide a regular income either on monthly, quarterly or on annual basis. However, some depositors do not withdraw interest income from these investments and the money remains unpaid in the post office account. The un-drawn interest does not not earn any interest if depositors have not linked their savings account for credit of their monthly/quarterly/yearly interest.

Benefits of linking savings account with MIS/SCSS/TD accounts:

a) Interest credited in savings accounts will earn additional interest, if interest is not withdrawn directly from MIS, SCSS, Time Deposit accounts.

b) Depositors can withdraw due interest without visiting the post office and utilise the same through various electronic means.

c) Filling up multiple withdrawal forms for each MIS, SCSS, Time Deposit accounts can be avoided.

d) Depositors may avail facility of automatic credit of interest amount from their MIS, SCSS, Time Deposit accounts through PO Savings Account to Recurring Deposit (RD) account.