Small Savings Schemes: 2 Account Related Tasks To Complete Before March

Customers who invest in small savings schemes or post office schemes operated by the Department of Posts, Ministry of Communications, Government of India, now have 2 important tasks to perform before the end of the fiscal year on March 31, 2022.

Minimum contributions on PPF, RD, SSA

Every financial year a minimum investment is required to maintain a 15-year Public Provident Fund Account (PPF), a 5-year Post Office Recurring Deposit Account (RD), and a Sukanya Samriddhi Account (SSA) operational. To keep the PPF account active, a minimum deposit of Rs 500 is required in PPF account. If a minimum deposit of Rs.500/- is not made in any fiscal year, the PPF account will be closed. To activate a terminated account, the depositor must deposit a minimum payment of Rs. 500 plus a default fee of Rs. 50 for the defaulted year.

Similarly, a minimum deposit of Rs 250 is required in a fiscal year for Sukanya Samriddhi Account (SSA). If a minimum deposit of Rs. 250 is not made in a given fiscal year, the account will be classified as a defaulted account. Defaulted accounts can be reactivated before the expiration of 15 years from the date of account establishment by paying the minimum contribution amount of Rs. 250 plus Rs. 50 penalty fee for each defaulted year.

According to the official website of India Post, a monthly deposit of Rs 100 is required for the National Savings Recurring Deposit Account (RD) and additional deposits can be made up to the 15th of the month provided the account is started before the 15th of the given month. If the account is started between the 16th and the final working day of the calendar month, the following deposits may be made up to the last working day of the month. If a subsequent deposit is not made by the required day for a month, a penalty is imposed for each failed month, with a default of Rs 1 rupee levied.

Because all of these accounts are required to have minimum deposits, the fiscal year will end on March 31, 2022, and individuals who have all of the aforementioned accounts but have not made the required minimum deposits should not delay in making the deposit and completing the task as soon as possible to keep their account active.

Linking PO Savings Account or a bank account with small savings schemes

The Department of Posts released an announcement on 02.03.2022 mandating the linking of a PO Savings Account or a bank account with Post Office Monthly Income Scheme (MIS), Senior Citizen Savings Scheme (SCSS), and Post Office Time Deposit Account (TD) accounts for the credit of monthly/quarterly/yearly interest. Linking a PO Savings Account or a bank account to an MIS/SCSS/TD account not only provides interest payment benefits but also earns additional interest if interest is not withdrawn from the MIS/SCSS/TD account.

Depositors can also withdraw their interest online without having to visit a post office. Account-holders can also use the PO Savings Account to transfer interest from their MIS/SCSS/TD accounts to their RD accounts. According to a circular released by the Department of Posts "Interest on MIS/SCSS/TD 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 his/her Savings Account with MIS/SCSS/TD accounts up to 31.03.2022 and interest is credited in MIS/SCSS/TD sundry office accounts, the outstanding interest should be paid only through credit in PO Savings Account or by Cheque. Interest payment in cash shall not be allowed from MIS/SCSS/TD sundry office account w.e.f. 01.04.2022."

As a result, along with his or her MIS/SCSS/TD accounts, an individual should fill out SB-83 Form (Application for availing facility of automatic transfer (Standing Instruction) for linking MIS/SCSS/TD accounts to his PO Savings Account and submit the form with MIS/SCSS/TD account passbook to the post office. In the event of a bank account, an individual must submit an ECS-1 Form (ECS Mandate Form) along with the MIS/SCSS/TD account passbook, a cancelled cheque, or a copy of the first page of the passbook of the bank account in which the interest is to be credited.