If you have invested or are investing in small savings schemes of post office like PPF, SSY and NSS, then this news is useful for you. The government is going to change the rules related to these schemes from October 1. Recently, the Department of Economic Affairs of the Finance Ministry has issued a circular regarding the new rules.
Let us tell you that the Finance Ministry has the right to regulate small savings accounts. According to the circular issued, if any account is found irregular, then it should be sent for necessary regularization by the Finance Ministry in compliance with the established rules. The Department of Economic Affairs has issued 6 new rules for the PPF, SSY and NSS schemes of the post office. These rules will be applicable on these small savings schemes from October 1. Let us know what changes are going to happen in the PPF, SSY and NSS schemes of the post office.
1. Irregular National Small Savings Account
It is divided into three categories.
First – Rules under two NSS-87 accounts opened before DG’s order (2 April 1990). The prevailing scheme rate will be applicable on the first account opened, while the prevailing POSA rate with 200 bps on the outstanding balance will be applicable on the second account. The deposit amount in both these accounts should not exceed the annual limit. If excess deposit is made, it will be returned without interest. From October 1, 2024, both accounts will get zero percent interest rate.
Second – two under NSS-87 account opened after DG’s order (2 April 1990)
Rules. The first account opened will get the benefit of the prevailing scheme. The prevailing POSA rate will be applicable under the second account. From October 1, 2024, both accounts will get zero percent interest rate.
Third- In case of more than two NSS-87 accounts, the principles mentioned for the two accounts opened before/after the DG’s order will apply. For the third account which is more irregular, no interest will be paid and the principal amount will be refunded to the investor.
2. PPF account opened in the name of a minor
For such irregular accounts, interest will be paid in the post office savings account till the minor becomes eligible to open the account. That is, the applicable interest will be paid after the account holder attains the age of 18 years.
The maturity period will be calculated from the date on which the minor person completes 18 years of age. That is, the date from which the person becomes eligible to open an account.
3. More than one PPF account
The primary account will earn returns as per the scheme rate provided the deposited amount is within the maximum limit applicable for each year.
The balance in the second account will be merged with the first account, provided the primary account remains within the estimated investment limit every year. After the merger, the primary account will continue to earn interest at the applicable scheme rate. In case the balance in the second account exceeds the limit, there will be no return benefit on the excess amount. The excess amount will be refunded with zero interest.
Apart from the primary and secondary accounts, any additional accounts will earn zero percent interest from the date of opening the account.
4. Extension of PPF account by NRI
Only for those active NRI PPF accounts opened under the Provident Fund Scheme 1968 where Form H does not specifically ask for details about the residential status of the account holder. Such account holders (Indian citizens who become NRIs during the currency of the account) will be given the interest rate on Post Office Savings Account till 30 September 2024 and from 1 October, no interest rate will be available on these accounts.
5. Other small savings schemes opened in the name of minor except PPF, SSY
Such irregular accounts can be regularized and can get normal interest benefits. The interest rate for calculating normal interest on such accounts should be the rate applicable to post office savings accounts.
6. SSY opened by grandparents other than guardian
In case of accounts opened by grandparents, the security will be transferred to the person entitled under the applicable law. This means that in the case of such a parent (surviving parent) or legal guardian, the account will be transferred from October 1. If more than two accounts are opened in a family in violation of Para 3 of Sukanya Samriddhi Account Scheme, 2019, irregular accounts will be closed in violation of the guidelines of the scheme.
