The Government has revised rules for premature closure of National Savings Time Deposit accounts offered by Post Offices.
The Government has revised rules for premature closure of National Savings Time Deposit accounts offered by Post Offices. The changes through the National Savings Time Deposit (Fourth Amendment) Scheme, 2023 were notified on November 7, 2023.
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As per the new rules, the post office savings account interest rate will be paid if a 5-year Post Office Time Deposit account is closed after four years of opening the account but before maturity.
Further, premature closure of a 2 or 3-year Post Office Fixed Deposit account after the expiry of 1 year, the interest paid will be less by 2% than the specified rate at which the account was opened. The following is a look at the revised key points that depositors should know, as per the amendment:
Premature closure of an account shall be allowed on an application by the account holder in Form-4, subject to the following conditions:
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– No deposit shall be withdrawn before the expiry of six months from the date of deposit;
– Where a deposit in a one-year, two-year or three-year account is withdrawn prematurely after six months, but before the expiry of one year from the date of deposit, interest shall be payable to the account holder at the rate applicable to the Post Office Savings Account for the completed months.
– Where a deposit in a two-year or three-year account is withdrawn prematurely after the expiry of one year from the date of deposit, interest on such deposit shall be payable to the account holder for the completed years and months, commencing on the date of deposit and ending with the date of withdrawal, and such interest shall be calculated at the rate which shall be less by two per cent points than the rate specified for a deposit of one-year or two-year, as the case may be, and interest for the completed year shall be calculated on quarterly compounding basis
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– Where a deposit in a five-year account is withdrawn prematurely after four years from the date of opening of the account, interest shall be payable at the rate applicable to the Post Office Savings Account. Any interest already paid on the deposit shall be recovered from the amount of repayment of the deposit and the interest payable under this paragraph
