The Monthly Income Scheme (MIS), offered by the Post Office, is one of the most popular investment schemes in India, especially among people seeking stable, low-risk returns. In line with government efforts to modernise financial operations, a new rule was introduced recently. The interest earned from these schemes will only be credited to either a bank account or a Post Office savings account linked to the MIS.

In this article, learn the importance of linking your MIS to a bank or Post Office savings account, the consequences of not doing it, and how to complete the linking process.

• Link PO MIS to bank or savings account to avoid interest being credited to sundry accounts.
• Linking is mandatory as it simplifies interest crediting and enables electronic withdrawals.
• Additional interest can accrue on undrawn amounts in the linked savings account.
• Failure to link by March 31, 2022, leads to interest credit disruption.

Linking your savings account with the Post Office MIS will bring numerous benefits to you, making it a vital step for every MIS investor. Here are some of them:

1. Automatic credit of interest: Once linked, the interest generated by your MIS can be automatically credited into your bank or Post Office savings account. This means you will not have to do manual withdrawals, which significantly simplifies the process.
2. Additional earnings on interest: When you link your MIS to a Post Office savings account, the credited interest can earn extra returns. If the interest remains in the savings account without being withdrawn, it will generate additional interest, making your money work harder for you.
3. Convenient withdrawals: Linking your MIS to a bank or Post Office account enables electronic withdrawals. You can access your funds remotely without visiting a physical branch.
4. Ease of operation: Without the link, you would need to fill out several forms each time you wish to withdraw interest from your MIS, making it a cumbersome process.
5. Cross-account transfer: If you are a Post Office savings account holder, you can set up automatic transfer of interest from your MIS to a recurring deposit (RD) account, further enhancing your investment management.

As of March 31, 2022, linking your MIS to a bank or PO savings account is now mandatory. This has been implemented to ensure better control over POSB operations, promote digital transactions, and prevent fraud and money laundering. Failing to link your MIS with a savings or bank account will attract several complications:

1. Interest credited to sundry account: If you do not complete the linking process by the specified date, the interest earned from your MIS will be deposited into a sundry account. Retrieving this money involves additional paperwork and processes, making it time-consuming and inconvenient for you.
2. Restricted payment options: From April 2022, interest payments that are moved to a sundry account can no longer be disbursed in cash. You will only be able to claim the amount through either credit to your Post Office savings account or via a cheque.
3. Potential delays in accessing funds: If your interest ends up in a sundry account, the process of claiming this unlinked interest will involve extra forms and approvals, which will delay your access to funds.

Thus, it is in your best interest to complete the linking process promptly to avoid these hurdles.

The deadline to link your MIS to either a bank or Post Office savings account was set for March 31, 2022. If you have missed the deadline, it will be ideal to do this as soon as possible, and make use of the steps the government has implemented to facilitate the retrieval of unclaimed interest. 

1. Submit the ECS mandate form: Initiate the linking by submitting the ESC-1 form, which is also known as the ECS Mandate Form. This enables the electronic transfer of funds from your MIS to your bank account.
2. Provide a cancelled cheque or bank passbook: Along with the ECS Mandate Form, you will need to provide a cancelled cheque or a copy of the first page of your bank passbook. This document confirms the details of the bank account to which your MIS will be linked.
3. Endorsement of MIS passbook: Once the ECS form and required documents are submitted, your MIS passbook will be updated to reflect the linked bank account. This step confirms the completion of the linking process.

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1. Submit the Standing Instruction form: The form required for this linking process is the SB-83 Form, known as the Standing Instruction Application. This document ensures that the interest earned from the MIS is automatically transferred to your PO savings account.
2. Provide your passbooks: Along with the SB-83 Form, you will also need to submit your MIS and PO savings account passbooks for verification. The Post Office will authenticate these details to complete the linking.
3. Verification and update: Once the forms and passbooks are verified, your PO savings account will be linked to the MIS, and the interest will be credited automatically to the savings account.

To sum it up, linking your MIS to either a bank or Post Office savings account is no longer optional. It is a necessary step to ensure you continue to receive your interest without any hassle.

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