Check Last Date & Procedure To Link Savings Account With Post Office Schemes

For debt investors seeking higher returns than standard fixed deposits, post office small savings schemes are highly recommended, since they provide not only deposit security but also consistent returns as well as tax benefits under section 80C. Post office schemes are ideal for investors who want to save regularly to build long-term wealth, but the Department of Posts (DoP) has issued an alert to investors to link their Post Office Monthly Income Scheme (MIS), Senior Citizen Savings Scheme (SCSS), or Post Office Time Deposits (TD) with a post office savings account or bank account to get the relevant interest rate. Mandatory usage of Savings Account (PO Savings Account or Bank Account) for credit of monthly/quarterly/yearly interest in MIS/SCSS/TD accounts, according to the government.

In an official memorandum (OM) issued on 02.03.2022, the Department of Posts (DoP) has said "It has come to notice that some MIS/SCSS/TD accounts holders have not linked their savings account (either PO Savings Account or Bank account) for credit of their monthly/quarterly/yearly interest and Interest due in these MIS/SCSS/TD accounts are left unpaid in sundry office account. Further, it has been observed that many TD account holders are not aware of annual interest payment of TD Accounts. Also, many depositors of MIS/SCSS/TD accounts are not aware that undrawn interest shall not earn any interest."

Benefits of linking post office account or bank account with MIS, SCSS and TD

As per the department, MIS/SCSS/TD accounts holders will be able enjoy the following benefits by linking savings account (either PO Savings Account or Bank account) for interest payment.

• Interest credited in savings account will earn additional interest, if interest is not withdrawn directly from MIS/SCSS/TD Accounts.
• Depositors can withdraw due interest without visiting the post office and utilise the same through various electronic means.
• Filling up of multiple withdrawal forms for each MIS/SCSS/TD account can be avoided.
• Depositors may avail facility of automatic credit of interest amount from their MIS/SCSS/TD accounts through PO Savings Account to RD accounts.

Further the OM has stated that "In order to provide the above benefits to MIS/SCSS/TD accounts holders, to have better control over POSB 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 PO Savings Account or Bank Account for crediting of interest payment of MIS/SCSS/TD Accounts."

How to link a post office savings account with MIS/SCSS/TD?

The OM has clarified that "In case of Post Office Savings Account, the account holder shall submit SB-83 Form (Application for availing facility of automatic transfer (Standing Instruction) for linking of MIS/SCSS/TD accounts to his PO Savings Account along with his MIS/SCSS/TD accounts passbook for such an endorsement, and his Post Office Savings Account passbook to the post office for the purpose of verifying authenticity. Thereafter, post office concerned shall follow the procedure prescribed in rule 99(2) of POSB CBS Manual. SB-83 form shall be attached with Account Opening Form (SB-AOF). Necessary remarks should be made in the MIS/SCSS/TD passbook on the last page of the passbook with signature and stamp."

How to link a bank account with an MIS/SCSS/TD account?

The department has said in the OM that "In case of Bank Account, he shall 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 he desires to get the interest amount credited along with his MIS/SCSS/TD account passbook for such an endorsement at the post office concerned. Thereafter, post office concerned shall follow the procedure prescribed in rule 99(3) of POSB CBS Manual. SB-83 form shall be attached with Account Opening Form (SB-AOF). Necessary remark should be made in the MIS/SCSS/TD passbook on the last page of the passbook with signature and stamp."

Note

With effect from 04.2022, interest on MIS/SCSS/TD accounts will be credited solely to the account holder's PO savings account or bank account. If an account holder is unable to link his or her Savings Account with MIS/SCSS/TD accounts by 31.03.2022 and interest is credited to MIS/SCSS/TD miscellaneous office accounts, the outstanding interest shall be paid solely by credit in a PO savings account or by cheque.

Account-holders should also note that "The PO Savings Account or Bank Account, in which the interest payment is desired by the depositor of MIS/SCSS/TD Accounts, can be either single account type of the depositor(s) or joint account type in which the depositor(s) of MIS/SCSS/TD Accounts should be one of the depositors or guardians in savings account," the OM has noted.