PPF, Sukanya Samriddhi, Other Small Savings Schemes -- 6 New Rules Changing From 1 October 2024

From 1 October 2024 onwards, you will earn zero percent rate of interest if you don't meet the criteria mentioned in Department of Economic Affairs guidelines/circular.

New Delhi: The Department of Economic Affairs (DEA), Ministry of Finance has issued guidelines for processing the cases of regularization of irregularly opened accounts under various National Small Savings Schemes through Post Offices. DEA in a circular, issued on August 21 issued new guidelines.

Following six categories have been identified. Relevant guidelines issued by DEA, MoF are as below:

(1). lrregular NSS accounts: These have been assessed to be of the following types.

(a). Two NSS-87 accounts opened prior to DG Posts'Order. No. 35- 19/90 SB- lll dated 02.04.1990:

(i). The earliest/first opened account will get prevailing scheme rate.

(ii). The second account (opened after the first account) will get prevailing POSA rate plus 200 bps on the outstanding balance.

(iii). Points (i) and (ii) will be subject to the following conditions:

(a). Cumulative deposits in both the accounts put together should not exceed the applicable deposit limits for each year.

(b) Excess deposits (if any) shall be refunded to the investor without any interest.

(iv). Points (i) to (iii) are in the nature of one-time special dispensation allowed to investors of NSS-87 till 30 September 2024 of the date of OM dated 12th July 2024 issued by Ministry of Finance.

(v). From 1 Oct 2024 onwards, both the accounts will earn zero percent rate of interest.

(b) Two NSS-87 accounts opened after DG Posts' Order. No, 35- 19/90-SB-lll dated 02.04.1 990:

(i). The earlies first opened account will get the prevailing scheme

(ii). The second account (opened after the first account) will get prevailing POSA rate on the outstanding balance,

(iii). Points (i) and (ii) are subject to the following conditions:

(a). Cumulative deposits in both accounts together should not exceed the applicable deposit limit for each year.

(b). Excess deposits (if any) shall be refunded without any interest to the investor.

(iv). Points (i) to (iii) are in the nature of one-time special dispensation to the investors ol NSS-87 till 30 September 2024 from the date of OM dated 12th July 2024 issued by Ministry of Finance.

(v). From 1 Oct 2024 onwards, both the accounts will earn zero percent rate of interest.

(c). ln case of more than two NSS-87 accounts

Principles outlined for two accounts opened before/after DG Posts' Order. No. 35-19/90-SB-lll dated 02.04.1990, shall apply. For the third account more irregular accounts, no interest shall be paid and the principal amount shall be refunded to the investor.

Please be advised that all accounts opened under NSS-87 and NSS-92 shall get zero percent rate of interest rate from 1 October 2024.

2. PPF account opened under the name a minor

(a). POSA interest shall be paid for such irregular accounts until the individual (minor) becomes eligible for opening of account, that is, the individual attains 18 years of age. Thereafter, the applicable interest rate will be paid. 

(b). Maturity period for such accounts will be calculated from the date the minor becomes an adult, that is, the date from which the individual becomes eligible to open the account.

3. More than one PPF Account

(a). The primary account shall earn the scheme rate of interest subject to the deposit being within the ceiling applicable for each year. (Primary Account is one of the two accounts chosen by the investor in any Post Office/ agency bank where the investor prefers to continue with the account upon regularisation). 

(b). The balance amount in the second account shall be merged with the first account subject to the primary account remaining within the applicable investment ceiling in each year. Post-merger, the primary account will continue to enjoy the prevailing scheme rate of interest. Excess balance in the second account, if any, shall be refunded with Zero percent rate of interest. 

(c).  Any additional accounts beyond the primary and second account, shall earn zero percent rate of interest from the date of opening of that account.

4. Extension of PPF account by NRI

For only those active NRI's PPF accounts opened under the Public Provident Fund Scheme (PPF), 1968, where Form H did not specifically ask the residency status of the account holder, POSA rate of interest shall be given to the account holder (Indian citizen who became NRI during the currency of Account) till 30th September 2024. Thereafter, the said account shall earn zero percent rate of interest.

(5). Small Savings scheme account opened under the name of a minor (Except PPF and SSA)

 Such irregular accounts may be regularised with simple interest. The interest rate for calculation of simple interest on the account should be the prevailing POSA rate.

(6). Regularization of Sukanya Samriddhl Account (SSA) opened by Grandparents, other than Guardian:

(a). ln case of accounts opened under the guardianship of grandparents (who are other than legal guardian), the guardianship shall be transferred to a person entitled under the law in force, that is, to the natural guardian (alive parents) or Legal Guardian.

(b). lf more than two accounts are opened in a family in violation of Para 3 of Sukanya Samriddhi Account Scheme, 2019, then the irregular accounts shall be closed by treating it as account opened in contravention to the scheme guidelines.

The circular said, all Post Offices are directed to obtain PAN and Aadhaar details of the account holder(s)/ guardian (if not already available) without fail and feed the same in the system before forwarding the regularization requests to this office.

All Post Offices shall take urgent action to identify such accounts and inform account holders of the approved guidelines through all channels. All Circles/Regions/Divisions are requested to proactively track cases that need regularization, so as to avoid inconvenience to account holders of the small savings schemes.