Those who have invested in Post Office Monthly Income Scheme (MIS), Post Office Time Deposits (TD), or Senior Citizen Savings Scheme (SCSS) receive interest in cash regularly on the plan they have selected. It can be monthly, quarterly, or on yearly basis.
But now, the Department of Posts has changed the scheme and asked individuals to link their Post Office saving account or bank account with their TD, SCSS, and MIS so that they can receive the interest directly into their bank account. This plan has come into effect on April 1, 2022.
The Department of Posts made this decision in order to encourage digital transactions, combat money laundering, and prevent fraud. The last date to link a savings account was March 31, 2022.
How to link MIS/SCSS/TD with a bank account?
To link a savings account with a post office fixed deposit, customers need to submit the ECS Form and cancelled cheque. Apart from this, the first page of the passbook of the bank account and passbook of the MIS/SCSS/TD account will have to be shown for verification.
How to link Post Office Savings Account to MIS/TD/SCSS?
The account holder of a Post Office Savings Account must submit the SB-83 Form, which is a Standing Instruction application for automatic transfer. It will link the PO Savings Account to the MIS/SCSS/TD accounts.
Benefits of linking your savings account to MIS, TD, SCSS
If your MIS account is linked to a savings account, account holders can withdraw their money at any time without visiting the post office. Apart from this, account holders will be freed from the hassle of filling a separate form to withdraw money and the interest money will be credited automatically.
Ministry of Communications Department of Posts issued a circular that states:
a) Interest credited to a savings account earns additional interest if it is not withdrawn directly from an MIS/SCSS/TD account.
b) Depositors can withdraw their interest without having to visit a post office and can use it in a variety of ways, including electronic means.
c) Avoiding the need to fill out multiple withdrawal forms for each MIS/SCSS/TD account.
d) Depositors may request automatic credit of interest amounts from their MIS/SCSS/TD accounts to RD accounts via PO Savings Account.
The government has kept interest rates on various small savings schemes constant. Sukanya Samriddhi Yojana, Senior Citizen Saving Scheme, and PPF are among the small savings programmes that currently offer 7.6%, 7.4%, and 7.1%, respectively. SBI’s 5-10 year fixed deposits, on the other hand, drew interest rates of 5.50 percent. Small savings scheme interest rates are revised on a quarterly basis.