Payment of Interest for Savings Scheme (POSB).

 

17 Payment of Interest

 

(1). The deposits made in an account shall earn interest at the rate, as may be notified by the Central Government, from time to time, in respect of the Savings Scheme concerned.

 

(2). No interest shall be payable on an account opened or maintained, or on a deposit made, in contravention of these rules.

 

(3). Interest shall be calculated in the manner as provided in the Savings Scheme.

 

(4). If a depositor in a single account, or any of the depositors in a joint account, or either the guardian or minor depositor or depositor who is person of unsound mind in an account opened on behalf of a minor or a person of unsound mind, as the case may be, subsequently becomes Non-resident Indian during the period the account is in operation, the account shall earn interest at applicable rate till its maturity and no interest after the date of maturity shall be payable on such accounts and the benefits available to the depositor shall be available only on non-repatriation basis.

 

(5). If a depositor in a single account, or any of the depositors in a joint account, or either the guardian or minor depositor or depositor who is a person of unsound mind, in an account opened on behalf of a minor or a person of unsound mind, as the case may be, ceases to be a citizen of India, the account shall be closed or deemed to be closed from the last day of the month preceding the month in which the depositor ceases to be a citizen of India and interest at the rate applicable to the Post office Savings Account shall be payable on such accounts till its closure.

 

(6). An account which has matured but not closed, the eligible balance in the account shall continue to earn interest at the rate applicable to the Post Office Savings Account, till the closure of the account.

 

Note: Post-maturity interest is applicable on all the schemes including the discontinued schemes notified in Government Savings Promotion Act 1873 (5 of 1873).

 

(7). In case of periodical interest payment in TD, MIS and SCSS Accounts, no additional interest shall be payable on the amount of interest that has become due for payment but not withdrawn by the account holder.

 

(8). Any interest credited erroneously to an account shall be reversed immediately on the detection by the Accounts Office under written intimation to the depositor

 

POSB (CBS) Manual Page No 45, 46, Corrected upto 31.12.2021