TIME DEPOSIT - PAYMENT OF ANNUAL INTEREST
1. Time Deposits carry interest at rates prescribed from time to time. The interest is payable annually. While calculating interest, it will be rounded off to the nearest one rupee as is done in savings accounts.
2. If the date of payment of interest falls on a non-working day, the payment shall be deemed to be due on the working day immediately preceding. No additional interest shall be payable on the amount of interest that has become due for payment but not withdrawn by the account holder.
3. The interest payable will be calculated by the FINACLE CBS Application on due date and credited either to the Post Office or Bank Savings Account of the customer if mandate (standing instruction / ECS mandate) has been given by the depositor in writing or credited to TD Sundry Office Account opened separately for 1,2,3 and 5 Years TD on due date through a batch process.
4. Whenever customer comes for withdrawal of interest, the same will be paid after obtaining from the depositor an application for withdrawal in the prescribed form of application for withdrawal (SB-7) in the same manner as prescribed for Savings account withdrawals.
5. The due unpaid interest will be displayed by the Finacle CBS Application. Counter PA should select the interest amount to be paid and complete the process. Mode of payment will be selected by Counter PA as Cash or transfer. In case, transfer mode is selected, customer’s Post Office Savings Account should be entered by Counter PA in the relevant field.
6. Entry will be made in the Passbook through Passbook printer. If it is a 1-year account, the amount of interest will be repaid along with the principal at the time of closure. In case, the depositor desires to have the amount of interest credited to his/her Post Office Savings Account standing in any post office working on FINACLE CBS Platform, the depositor has to write on the withdrawal form “Please credit to my Savings Account No._________________” on the receipt portion above signatures.
7. For automatic credit of interest, the TD Account holder has to submit an application in the prescribed form (specimen given at Appendix-VI) along with TD and Savings Account Passbooks or specify it in the account opening form at the time of account opening.
8. The counter PA and Supervisor will verify the details in the system and update the same. On the due date, a batch file will automatically run and interest will be credited to the respective Savings accounts.
9. If the account holder account has given ECS mandate for crediting the annual interest into his bank account along with cancelled cheque and first page of Bank passbook, the counter PA will verify the details and update the same in CBS Finacle. The procedure prescribed in Appendix-IV of CBS Manual will be followed.
Payment of interest on pledged Account
(i). In the absence of any special terms stipulated by the parties in the contract of pledge, the amount of interest accrued on the Post Office Time Deposit Account will be payable to the pledgee as the entire account has been pledged to him including the right to receive interest. If any interest becomes payable before the date of maturity and also before the date of pledge and there is no stipulation to the contrary, the interest will then be payable to the pledger and not to the pledgee. The interest payable to the pledgee which has not been drawn by him before the date of pledge will still be payable to him after the account has been pledged. Stipulation to the contrary, the interest will then be payable to the pledger and not to the pledgee. The interest payable to the investor which has not been drawn by him before the date of pledge will still be payable to him after the account has been pledged.
(ii). The outstanding annual interest (if any) shall be paid to the Depositor before pledging the account.
As per SB Order No. 4/2022, linking of POSB account to MIS/TD/SCSS accounts for crediting interest has been made mandatory.
Click here for SB Order No. 4/2022
