Post Office Linked Account: Starting April 1, 2022, you may not be able to withdraw interest income received on post office MIS, SCSS, and Time Deposit accounts in cash. In the case of MIS, SCSS, and Time Deposit accounts, the government has made it essential to utilize a Savings Account to credit monthly, quarterly, and annual interest. As a participant in modest savings plans such as the Monthly Income Scheme (MIS), the Senior Citizens Savings Scheme Account (SCSS), or a Time Deposit account, you must create a PO Savings Account or a Bank Account. Depositors must link their savings accounts to their MIS, SCSS, and TD accounts if they already have one. With effect from 01.04.2022, interest on MIS, SCSS, and Time Deposit accounts will be credited solely to the account holder’s PO Savings Account or Bank Account. If an account holder is unable to link the Savings Account with MIS, SCSS, or Time Deposit accounts by March 31, 2022, the outstanding interest will be paid only by credit in the PO Savings Account or by Cheque. From April 1, 2022, cash interest payments from the Monthly Income Scheme (MIS), Senior Citizens Savings Scheme Account (SCSS), or Time Deposit account would be prohibited. The interest payment in the 5-year Monthly Income Scheme (MIS) is only made once a month, but the interest payment in the 5-year Senior Citizens Savings Scheme Account (SCSS) is made quarterly. The interest is only paid on an annual basis with a Time Deposit account. To link a savings account to an MIS/SCSS/TD account, follow these steps: Post Office Savings Account: Account holders with a Post Office Savings Account can use the automatic transfer (Standing Instruction) feature to link their MIS, SCSS, and Time Deposit accounts. The PO Savings Account or Bank Account in which the depositor of MIS, SCSS, Time Deposit accounts wishes to receive interest payments can be a single account or a joint account in which the depositor of MIS, SCSS, Time Deposit accounts must be one of the depositors or guardians in the savings account. To get the interest amount credited to a Bank Account, the depositor must submit an ECS Mandate Form together with a canceled check or a copy of the first page of the Bank Account’s passbook. Regular revenue is provided through deposits in post office MIS, SCSS, and Time Deposit accounts on a monthly, quarterly, or annual basis. Some depositors, however, do not take advantage of the interest income from these investments, and the money stays unpaid in the post office account. If depositors have not connected their savings account for the credit of their monthly/quarterly/yearly interest, the un-drawn interest does not generate any interest.
Advantages of connecting a savings account to an MIS/SCSS/TD account include:
(a) If interest is not taken directly from MIS, SCSS, or Time Deposit accounts, interest credited to savings accounts will accrue extra interest. b) Depositors can withdraw their interest without having to go to the post office and use it in a variety of ways. c) It is possible to avoid filling out several withdrawal forms for each MIS, SCSS, and Time Deposit account. d) Through a PO Savings Account, depositors can have interest from their MIS, SCSS, and Time Deposit accounts automatically credited to their Recurring Deposit (RD) account.