From April 1, 2022 Post Offices will not pay interest in cash on Senior Citizen Savings Scheme, Term Deposit Accounts and Monthly Income Scheme. The interest earned on these saving schemes will be submitted directly to saving account or checking account. Post office has made it mandatory that you either open savings account or open saving bank account in any other bank.
If the account holder is not in a position where he can hyperlink financial savings accounts with Senior Citizen Savings Scheme, Term Deposit Accounts and Monthly Income Scheme then there is a solution. Your outstanding interest will either be given to you in a cheque or it will be directly transferred to your post office savings account.
The circular revealed that many beneficiaries have not yet linked their saving bank accounts with post office. It said, “The interest due in these Senior Citizen Savings Scheme, Monthly Income Scheme and Term Deposit accounts are left unpaid in sundry office accounts. Further, it has been observed that many term account holders are not aware of the annual interest payment of TD Accounts.”
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People have asked about reasons behind this change in rules and regulations to which Department of Post has said that there are rising cases of money laundering and several other frauds. The decision will also promote digital banking among citizens to increase accuracy of the transactions.
The circular said, “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.”
Make a note that if you have not taken on interest amount then you will not earn any interest over it. But if you transfer that to saving bank account then it will give you annual interest.
