If you have a National Savings (TD) Term Deposit account, you must link your account to a PO savings or bank account by March 31, 2022, as the government is making linking mandatory from April 1, 2022 One of the main advantages of linking a TD account to a PO savings account or a bank account means that the holder will earn additional interest on their savings.
The government took the decision after finding that some TD accounts were not linked to PO savings or bank accounts for crediting their monthly, quarterly, half-yearly or annual interest. Thus, the interest due on these TD accounts remained unpaid in the miscellaneous office account. Additionally, the Center has observed that many TD accounts are unaware of the annual interest payment for TD accounts. Also, many depositors are also unaware that undrawn interest will not earn any interest.
By linking a TD account to a savings account or PO bank account, an account holder will earn additional interest on interest credited to these accounts, however, this only applies when interest is not withdrawn from the accounts TD. Simply put, the guaranteed interest you earn on your TD account is eligible for additional interest if they haven’t withdrawn your interest – but for this the account must be linked to PO savings or bank accounts.
Moreover, by linking a TD account with a savings account or a PO bank account, depositors can withdraw the interest due without going to the post office and use it through various electronic means. Also, it is possible to avoid filling out multiple withdrawal forms for accounts; and the ability to automatically credit interest amount from TD account via PO savings account to RD accounts is also available.
Other reasons to link TD accounts to savings account or PO bank account are to have better control over POSB transactions, promotion of digital transactions, prevention of money laundering activities and as a measure preventative to prevent fraud.
In a statement, the Center said that “the competent authority has decided to compulsorily link the PO savings account or the bank account to credit the interest payment of the MIS/SCSS/TD accounts”.
Under the new guidelines, CEPT, Chennai is required to provide a list of active TD accounts not linked to a savings account (PO savings account or bank account) to all circles and CPC (CBS). In addition, the circles should organize a special campaign to link savings accounts to TD accounts for interest payments, either by sending a letter of request or by contacting these account holders.
During this time, account holders will have the option to have interest credited from TD accounts to their postal savings account or bank account.
To link a TD account to a PO Savings account, the account holder must submit Form SB-83, while to link a bank account, a TD account holder must submit Form ECS-1 with a copy of the canceled check from the first page of the passbook. from the bank account. In addition, the account holder must present their passbooks with these forms for such endorsement at the relevant post office.
In addition, the Center advised India Post Payments Bank to devise a similar foolproof system to enable its customers to obtain interest credit from MIS/SCSS/TD accounts to their IPPB savings account, and inform the Department so that all those concerned are informed. .
“Interest on MIS/SCSS/TD accounts will only be credited to the account holder’s PO savings account or bank account effective April 1, 2022,” the statement read.
If you have failed to link the TD Account to the PO Savings Account or Bank Account by March 31, 2022, interest is credited to various TD office accounts and unpaid interest must be paid only by credit to the PO savings account or check. This means that cash interest payments are not permitted from TD’s miscellaneous office account from April 1.
TD accounts are one of the post government savings schemes with interest payable annually but calculated quarterly. The interest rate on the TD account varies from 5.5% to 6.7% depending on the mandate. The account can be opened with a minimum of ₹1000 and in multiples of ₹100. There is no maximum investment limit in this account. The amount of the deposit will be refundable at the end of a period of 1 year, 2 years, 3 years, 5 years (as the case may be) from the date of opening.