The government has recently made important changes to the rules for small savings accounts.
These new rules will help regularize old accounts and accounts opened in the name of grandparents.
The changes will also affect Non-Resident Indian (NRI) account holders and accounts under the Sukanya Samriddhi Yojana (SSY).
Impact on PPF Accounts for NRIs
NRIs with Public Provident Fund (PPF) accounts currently receive interest at the Post Office Savings Account (POSA) rate.
This interest rate will remain in effect until September 30, 2024. However, starting October 1, 2024, the interest rate on these accounts will drop to 0%.
This means that if NRI account holders do not update their PPF accounts according to the new rules, they will not earn any interest.
To avoid losing out on interest, NRIs are advised to update their account information promptly.
New Guidelines for PPF and SSY Accounts
According to the new guidelines, the POSA interest rate will apply to PPF accounts opened in a minor’s name until the child turns 18.
After that, the standard PPF interest rate will apply, and the account’s maturity will be calculated from that age.
Additionally, if a person has more than one PPF account, the interest will only be applicable on the primary account.
Funds in any additional accounts will be transferred to the primary account, which means 0% interest will be given on the extra amounts.
For the Sukanya Samriddhi Yojana (SSY), the new rules state that accounts opened by grandparents without the parents’ names must be transferred to the legal guardians or natural parents.
This measure aims to ensure transparency and proper monitoring of the accounts, helping to prevent any irregularities in the future.
