SSY, PPF, NSS: These small savings schemes to have new rules from October 1; will it benefit you? Check details

The Ministry of Finance (MoF) has issued new guidelines for regularising illegally formed accounts under National Small Savings (NSS) initiatives at Post Offices. The ministry released a circular notifying the revisions on August 21, 2024.

The Department of Economic Affairs has issued new regulations that apply to investors in the National Savings Scheme (NSS), Public Provident Fund (PPF), and Sukanya Samriddhi Account (SSA). 

The guidelines have been issued in the following sections:
- Irregular National Savings Scheme (NSS) accounts
- Public Provident Fund (PPF) accounts opened under a minor's name
- Holding multiple PPF accounts
- Extension of a PPF account by a Non-Resident Indian (NRI)
- Regularisation of Sukanya Samriddhi Account (SSA) initiated by grandparents instead of guardians.

A look at changes in these small savings schemes:

NSS-87 Accounts

Accounts opened before and after April 2, 1990

Before April 2, 1990: The first account will earn the current scheme rate while the second account will earn the current Post Office Savings Account (POSA) rate plus 2 per cent of the balance. Beginning October 1, 2024, both accounts will receive zero per cent interest.

After April 2, 1990: The first account will earn the current scheme rate while the second account will earn the current POSA rate. Beginning October 1, 2024, both accounts will receive zero per cent interest.

If someone has more than two accounts, no interest will be paid however, the principal amount will be returned.

Sukanya Samriddhi Accounts

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

(a) In case of accounts opened under the guardianship of grandparents (who are other than legal guardians), 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) If 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 them as accounts opened in contravention of the scheme guidelines.

Public Provident Fund (PPF) accounts

Minor account: POSA interest will be paid until the child reaches 18. Afterward, the relevant interest rate will be imposed.

Maturity will be calculated starting with the minor's 18th birthday.

More than one PPF account

If deposits do not exceed the yearly limit, the primary account will receive the scheme rate.

The balances of any subsidiary accounts will be combined into the principal account. Excess sums will be repaid at 0 per cent interest.

Additional accounts beyond two will receive 0 per cent interest from the day they are opened.

NRI accounts: Active NRIs with PPF accounts that did not require residence information will get POSA interest till September 30, 2024. After this date, the interest will be zero per cent.