What happens if I have two NSS-87 accounts opened before the DG order?

One account will earn the Post Office savings account rate plus 200 basis points, and the other will earn the government scheme rate.

What interest will my second NSS-87 account earn if opened after the DG order?

The second account will earn the Post Office savings account rate on the outstanding balance.

What is the consequence of not regularising multiple NSS-87 accounts by 30th September 2024?

Accounts will attract zero per cent interest from 1st October 2024.

Can minors have PPF accounts?

Yes, but the interest will be based on POSA rates until they turn 18.

What happens if I unknowingly open more than one PPF account?

Only one account will earn the government scheme rate; additional accounts will earn zero interest.

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New Rules For PPF, Sukanya Samriddhi, And Small Savings Schemes Effective Oct 1, 2024!

Neha Gupta

Author

Updated: 28-01-2025 at 6:49 AM

New Rules For PPF, Sukanya Samriddhi, And Small Savings Schemes Effective Oct 1, 2024!

With effect from October 1, 2024, there would be significant changes in the management and supervision of small savings schemes like the Public Provident Fund (PPF) and Sukanya Samriddhi Yojana (SSY). The Department of Economic Affairs introduced these changes under the Ministry of Finance to regularise irregularly opened NSS accounts through Post Offices. In this blog, we will take you through these new rules and their effect on PPF, SSY and other small savings schemes that will enable your investments to stay compliant and secure.

Irregular NSS Accounts Regularisation

The first series of modifications are directed towards categorising irregular NSS accounts into three types:

Two NSS-87 Accounts Opened Before the DG Order: If you have two NSS-87 accounts opened before the Director General (DG) Posts’ order, Post Office savings account rate plus 200 basis points on outstanding balance will be charged on one account while another account will receive a prevailing govt scheme rate. Nonetheless, if not regularised after September 30, 2024, both accounts would attract zero per cent interest.
Two NSS-87 Accounts Opened After the DG Order: For accounts opened after the DG order, the earliest account will earn interest at a rate prevailing under the govt scheme while, on the other hand, the second account will earn a POSA rate on the outstanding balance only. Again, if not regularised, these accounts will attract zero per cent interest from October 1, 2024.
More Than Two NSS-87 Accounts: If you have more than two NSS-87 accounts, then these rules will cover only those of your first two. The third and all subsequent ones shall be refunded their principal amount without any return as well.

These changes underscore the importance of regularising any irregular NSS accounts before the October deadline to avoid losing out on interest.

PPF Accounts Opened Under The Name Of A Minor

For PPF accounts opened under the name of a minor, until he/she is 18 years old (when he/she becomes eligible to open PPF), POSA interest rates shall be enforced.

These accounts’ duration is counted from when minors become adults.

Conversely, this has been done so that there is a reasonable interest on this account every time it earns an income between now and maturity.

Multiple PPF Accounts

Some investors may open multiple government PPF accounts unknowingly. The main account will continue to earn the govt scheme rate in force as long as the deposits within the annual limits are maintained.

The balance of the second PPF account shall be combined with the first one and any excess should be returned at zero interest per annum.

Opening more than one PPF account, other than primary and secondary ones, attracts a zero per cent interest.

These changes show why you need to have only one PPF account so that you can maximise your earnings and eliminate all complications related to it.

Extension Of PPF Account By NRIs

For NRIs who have active Public Provident fund accounts under the 1968 government scheme where Form H does not ask for residency status, the POSA rate of interest shall apply up to 30th September 2024.

Such accounts will attract no interest as of October 1st, 2024. NRIs must keep in touch with these developments to make informed decisions about their PPFs.

Small Savings Scheme Accounts Opened Under a Minor’s Name (Except PPF And SSY)

In case any small savings scheme account has been opened irregularly under the name of a minor except for PPAs and SSYs, it can be regularised with simple interest calculated at the extant POSA rate so that even such irregular accounts can earn reasonable returns while they comply with the new regulations.

Regularisation Of Sukanya Samriddhi Account (SSA) Opened By Grandparents Or Other Guardians

For Sukanya Samriddhi Accounts (SSA) opened by Grandparents or Other non-legal guardians, the guardianship must be transferred to the rightful legal guardian, usually the parents.

If more than two SSY accounts have been opened in violation of 2019 guidelines for the Sukanya Samriddhi Account Scheme then irregular accounts should be closed.

This is meant as a protective measure to ensure that SSY accounts are managed consistently with their intended purpose under this scheme to safeguard the girl child’s interests.

Conclusion

The importance of adhering to the government guidelines is highlighted in the new regulations for PPF, Sukanya Samriddhi Yojana and other government savings schemes. These changes are aimed at making irregular accounts regular and justly remunerating investors with returns that are commensurate to their savings. You must assess your PPF account, SSY account or any other small savings scheme and ensure that regularisation is done before October to comply with this deadline.

In case of queries and other information, connect with the designated authority from the Department of Financial Service official contact page.

For any doubts or question, drop a message or share your thoughts on the Jagruk Bharat community page!

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