Post Office FD: If you have invested in a Post Office FD or are planning to invest in one, this news is useful. Recently, a case of withdrawal from a Post Office FD has come to light that even reached the High Court.
Post Office FD: Many people who save with Indian post offices invest in fixed deposits. FDs are considered a safe investment, especially for major expenses like weddings. However, the question arises: should they be allowed to withdraw their funds if they need them before maturity? Recently, the Orissa High Court issued an important ruling on this issue, bringing significant relief to the general public.
What was the matter?
A woman had deposited her money in five fixed deposit schemes. The term of these fixed deposits was five years. However, her marriage was imminent, so she needed to withdraw money from her deposit immediately. She applied for premature withdrawal at the post office, but the post office rejected her request. According to post office rules, withdrawals before the five-year term were not possible.
Following this rejection, the woman filed a case in the Orissa High Court. Through her lawyers, she told the court that she needed to withdraw her FD prematurely due to wedding expenses.
Post Office Rules and Arguments
Rule 8(d) of the Post Office Term Deposit Scheme clearly states that deposits cannot be withdrawn before the completion of four years. However, Rule 8(d) amended in the notification dated November 7, 2023, stated that premature withdrawals are not completely prohibited. It also stated that if the funds are withdrawn after four years, the interest rate will be different.
Post Office lawyers argued in court that the rules are clear and withdrawals cannot be permitted before the completion of four years because the deposit period is five years. They said that the rules are the law and must be followed.
What did the High Court say?
The bench headed by Justice Dixit Krishna Sripada stated that the money belongs to the woman and that the need for money for the wedding is a legitimate emergency. Because of this, the woman’s emergency needs cannot be ignored. The court also pointed out that Rule 8(d) does not completely prohibit premature withdrawals. This rule only states that the interest rate on withdrawals after four years will be different. This does not mean that withdrawals are impossible.
Finally, the Orissa High Court upheld the post office’s refusal and told the woman that she could withdraw her deposit within two weeks. The court stated that allowing premature withdrawals due to her marriage was necessary to complete the ceremony. Furthermore, any delay in withdrawing the funds would attract a penalty of 1% per month on the interest.
