The government is planning to make some important major changes in the small savings schemes of the post office. These schemes include PPF, Sukanya Samriddhi Yojana, etc.
Under the new rules, interest will be deducted if there is more than one PPF account. The new major changes will come from immediate effect from October 1, 2024. The Finance Ministry has issued guidelines regarding this.
It states that if an account is found to be irregular, it will have to complete the necessary compliance procedures, otherwise the account may be closed. The government has set six categories for change.
This includes regularization of irregular National Savings Scheme accounts (NCS), PPF accounts opened in the name of a minor, more than one PPF account, and Sukanya Samriddhi Accounts opened by grandparents apart from parents.
PPF Account
In such a case, the applicable interest will be available only on the primary account. Provided the deposit 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 applicable investment maximum limit each year.
The primary account will continue to receive interest at the applicable rate after the merger. The excess balance in the second account (if any) will be refunded at a zero percent interest rate.
The primary account will be considered where the investor wishes to continue with the respective account (one chosen from the post office or bank) after the merger.
In the case of a third account, the interest will become zero from the date of opening.
Account in the name of a minor
Irregular PPF accounts opened in the name of children or minors will receive the normal interest rate of a post office savings account till they attain majority.
Only after attaining the majority, they will get the interest rate on PPF, which is currently 7.1% per annum, while the post office savings account is getting only 4% interest.
Sukanya Samriddhi Account
In cases of accounts opened by grandparents (who are not legal guardians), the guardianship of the account will be transferred to the legal guardian of the child.
If two accounts are opened in the same family, the irregular account will be closed. An irregular account means not depositing the minimum amount annually.
National Savings Account
Rules have been changed for three types of accounts related to NCS. This includes two accounts opened before April 1990 and more than two accounts opened after that.
In this, 0.20% post office savings account interest will be added extra for the first type of account. While only normal interest will be given on other types of accounts.
No interest will be given on the third account, rather their principal amount will be returned.
Instructions for post offices
All post offices will have to take PAN card and Aadhar card information from the account holders. The system will have to be updated before submitting the regularization application. Account holders will be informed about these major changes.