New PPF Rules Effective From October 1, 2024: 3 Major Changes You Need to Know

05 Sep, 2024

The Department of Economic Affairs, under the Ministry of Finance, recently released updated guidelines concerning Public Provident Fund (PPF) accounts held in minors' names, multiple PPF accounts, and the extension of PPF accounts for Non-Resident Indians (NRIs) under the National Small Savings (NSS) schemes via post offices. These revisions were announced through a circular issued on August 21, 2024, and will come into effect on October 1, 2024. The circular emphasized that the authority to regularize irregular small savings accounts lies with the Ministry of Finance. As a result, all cases involving irregular accounts must be submitted to the Ministry for appropriate regularization.

PPF accounts opened in the name of minors will accrue interest at the Post Office Savings Account (POSA) rate until the minor reaches the age of 18, which is when they become eligible to open their own account. After that point, the applicable PPF interest rate will be applied. The maturity period for such accounts will be calculated from the date the individual turns 18 and becomes eligible to independently open an account.

For investors holding more than one PPF account, the primary account will accrue interest at the scheme’s rate, provided the deposits do not exceed the annual limit. The primary account is selected by the investor from any Post Office or agency bank, and it is the account they choose to retain after regularization.

The balance in the second account will be combined with the primary account, as long as the total deposits in the primary account stay within the permitted investment limit each year. After the merger, the primary account will continue to earn interest at the scheme's current rate, while any surplus amount in the second account will be refunded with no interest.

Read more at The Economic Times

Publisher: Monisha Ponnappa | Bizprout Expert Systems Private limited