New PPF and SSY Rules Effective From 1st October 2024

Department of Economic Affairs has issued new guidelines for PPF and SSY accounts. What are these new PPF and SSY Rules Effective From 1st October 2024?

All these new rules are applicable to PPF and SSY accounts which are accounted for without following the proper rules.

New PPF and SSY Rules Effective From 1st October 2024

a) More than one minor account – As per the rule, you are allowed to open only one PPF account in the name of the minor, and a joint account is not possible. However, by surpassing this rule, if you have opened multiple accounts in your minor kid’s name, then for all such irregular accounts Post Office Savings Account interest will be payable until the minor becomes the major (18 Yrs).

The maturity period for such accounts will be calculated from the date the minor becomes an adult, that is, the date from which the individual becomes eligible to open the account.

b) More than one PPF Account – The primary account will earn the scheme rate of interest subject to the deposit being within the ceiling applicable for each year (Rs.1,50,000). (The Primary Account is one of the two accounts chosen by the investor in any Post Office/ agency bank where the investor prefers to continue with the account upon regularisation).

The balance amount in the second account shall be merged with the first account subject to the primary account remaining within the applicable investment ceiling in each year. Post-merger, the primary account will continue to enjoy the prevailing scheme rate of interest. Excess balance in the second account, if any, shall be refunded with Zero percent rate of interest.

Any additional accounts beyond the primary and second accounts will earn a zero percent rate of interest from the date of opening of that account.

c) Extension of PPF account by NRI – If you have a PPF account but you extended it as Form H (extension), it will not specifically asking residential status does not mean you are eligible for an extension of the PPF account. Hence, for such unauthorized extended accounts the post office savings account interest rate will be payable (I think up to the maturity (15 years) of the applicable PPF rate but from the extension period the savings account interest rate) till 30th September 2024. After that, such accounts will not earn any interest.

d) SSY Accounts opened by grandparents – If accounts are opened by 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.

e) If more than two SSY accounts are opened – As per the rule, one can open a maximum of two accounts within a family (for two children). However, if you have opened more than two accounts within a family, then the irregular accounts will be closed by treating them as accounts opened in contravention of the scheme guidelines.

Conclusion – Earlier there was no such mechanism to track such unauthorized accounts. Now due to PAN and Aadhaar linkage, it is easy to track all accounts. Hence, it is better to stick to the rules and regulations set by the government for opening and operating of both PPF and SSY accounts.