New rules for small savings schemes from 1st October 2024 you should know

The Ministry of Finance has issued updated guidelines for regularising irregular accounts across various National Small Savings Schemes. The guidelines cover a range of irregular accounts, including those under NSS-87, PPF for minors, and Sukanya Samriddhi schemes. All post offices and financial institutions must adhere to these new procedures to ensure proper compliance and efficiency. This update was formally announced in the Department of Economic Affairs circular on August 21, 2024.

The updated guidelines address six key categories of irregular accounts: NSS accounts, PPF accounts opened in the name of a minor, multiple PPF accounts, PPF account extensions by NRIs, and Sukanya Samriddhi Accounts (SSA) opened by grandparents who are not legal guardians.

The Ministry of Finance has issued new guidelines for dealing with irregular accounts under various National Small Savings Schemes. Here’s what you need to know:

Types of Irregular Accounts

1)NSS-87 Accounts

Before April 2, 1990: The first account gets the prevailing scheme rate, and the second account gets a higher rate. Together, both accounts should not exceed annual deposit limits.

After April 2, 1990, the first account receives the prevailing scheme rate, and the second account receives a standard rate. Both accounts must also adhere to deposit limits.

From October 1, 2024, these accounts will earn zero interest.

2)PPF accounts opened for minors

They earn POSA interest until the minor turns 18. After that, they will earn the applicable interest rate.

3)Multiple PPF accounts

The primary account will earn the scheme rate. Excess balances in secondary accounts will earn zero interest.

4) NRI PPF Accounts

If the account holder became an NRI during the account’s life, POSA interest will be given until September 30, 2024, after which it will be zero.

5) Small Savings Accounts for Minors (Other than PPF and SSA)

They will earn simple interest at the POSA rate.

6) Sukanya Samriddhi Accounts Opened by Grandparents

Guardianship will be transferred to the legal guardian. Extra accounts in a family will be closed.

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