BUSINESS: Last month, the Department of Economic Affairs under the aegis of the Finance Ministry had issued new guidelines to streamline existing Public Provident Fund accounts opened through post offices. These changes in PPF rules, effective from October 1, 2024, pertain to PPF accounts opened in the name of minors, multiple PPF accounts and extension of PPF accounts by non-resident Indians (NRIs) under National Savings Schemes through post offices. “It is required to be noted that the power to regularise irregular small savings accounts is vested with the Ministry of Finance. Therefore, all cases relating to irregular accounts should be referred to this Division for regularisation by the Ministry of Finance,” the DEA said in a circular. Changed rules for PPF accounts
For Public Provident Fund (PPF) accounts opened in the name of a minor, as per the revised rules, these accounts will continue to earn Post Office Savings Account (POSA) interest till the minor attains the age of 18 years.
The maturity period for such accounts will be calculated from the date of attaining majority by the minor, i.e. the date from which the person becomes eligible to open the account.
The primary account chosen by the investor in any post office or agency bank will earn interest at the scheme rate, provided the amount deposited does not exceed the annual maximum limit.
If there is a balance in the second account, the same will be consolidated with the primary account, as long as the total amount remains within the annual investment limit.
After consolidation, the primary account will continue to have the current scheme interest rate. Any surplus funds in the second account will be reimbursed at zero per cent interest rate.
PPF Accounts for NRIs
For non-resident Indians (NRIs) with active PPF accounts opened under the Public Provident Fund Scheme (PPF) of 1968, when the residential status of the account holder was not enquired about in Form H, the applicable interest rate will be as per POSA guidelines till September 30, 2024.
Thereafter, the account will start earning interest at zero per cent interest rate.
The Public Provident Fund (PPF) is a popular financial instrument backed by the Centre, designed to encourage savings and investments while offering attractive long-term benefits to investors.
