People can deposit invalid notes in Post Office savings account, says Finance Ministry

People can deposit the now-invalid Rs 500 and Rs 1000 denomination currency notes in their Post Office savings accounts, the Finance Ministry said on Wednesday.

The ministry had yesterday said that Rs 500 and 1,000 rupee notes cannot be used for making deposits in small savings schemes.

“...the deposits into Post Office Savings Account are excluded from the bar imposed (on deposits of invalid notes in small saving schemes,” it said while clarifying the Tuesday’s statement.

A Post Office Savings Account offers interest of 4 per cent per annum on individual or joint accounts. Such accounts can be opened with an amount as low as Rs 20.

Minimum balance to be maintained in a non-cheque facility account is Rs 50. Cheque facility is available if an account is opened with Rs 500 and for this purpose minimum balance of Rs 500 in an account is to be maintained.

After the demonetisation announcement on November 8, the ministry had received references from banks on whether the invalid high denomination currency notes can be deposited in accounts opened under small saving schemes.

To this, the Finance Ministry said that subscribers of small savings schemes “may not be allowed to deposit old currency note of Rs 500 and Rs 1,000 in small saving schemes”.

Small saving schemes include Post Office schemes, public provident fund (PPF) and Sukanya Samriddhi.

Earlier in the day, the RBI through a notification had asked banks not to accept the defunct currency notes for deposits in Small Saving Schemes with immediate effect.