A handful of post office programmes will no longer pay interest in cash. The Department of Posts has published a circular indicating that beginning April 1, 2022, post offices would no longer pay cash interest on three programmes.
The interest will only be paid on bank or post office savings accounts. According to a Live Mint article, the plans on which the post office would not pay cash interest include Term Deposit accounts, Monthly Income Scheme, and Senior Citizen Savings Scheme.
INTEREST ON TERM DEPOSIT ACCOUNTS
Term Deposit Accounts are classified into four varieties based on their term.
One-year, two-year, three-year, and five-year accounts are available.
The interest rate on one-year, two-year, and three-year term deposits is 5.5 percent.
The interest rate on the five-year term deposit account is 6.7%.
ACCOUNT FOR MONTHLY INCOME SCHEME
The annual interest rate on the Post Office Monthly Income Scheme Account (MIS) is 6.6 percent.
In the hands of the depositor, interest is taxable.
SAVINGS PLAN FOR SENIOR CITIZENS
A 7.4 percent annual interest rate, payable from the date of deposit of March 31/September 30/December 31 in the first instance, and afterwards on March 31, June 30, September 30, and December 31.
Meanwhile, Senior Citizen Savings Scheme, Monthly Income Scheme, and Term Deposit account holders should be aware that undrawn interest on these accounts will not earn you any interest. However, if interest is credited to a savings account, you might make more money.