The government has tried to regularize irregular accounts under National Small Savings Schemes on 21 August 2024 with new guidelines. This includes accounts like NSS, PPF, NRI PPF and Sukanya Samriddhi. The main objective is to regularize these accounts and streamline the related interest rates.
The government has tried to regularize the accounts opened irregularly under the National Small Savings Schemes through the post office. A new circular has been issued for this. The Department of Economic Affairs, Ministry of Finance has issued this circular on August 21, 2024. These changes have been announced in it. Some of the popular schemes of Small Savings Schemes include Senior Citizen Savings Scheme, Sukanya Samriddhi Yojana, PPF, NPS, National Savings Certificate, Post Office Monthly Income, Kisan Vikas Patra, Employees Provident Fund Scheme, Recurring Deposit etc. The new changes will come into effect from October 1, 2024. According to a report in Economic Times, six categories have been identified for the change. The guidelines for these are as follows- Irregular NSS accounts, PPF accounts opened in the name of minor, multiple PPF accounts, NRI-extended PPF accounts and regularisation of Sukanya Samriddhi Accounts (SSA) opened on behalf of grandparents other than parents are the main categories.
1) Irregular NSS accounts
These have been classified into the following types:
- Two NSS-87 accounts opened before DG order
- Two NSS-87 accounts opened after DG order
- In case of more than two NSS-87 accounts
(a). NSS-87 accounts opened prior to DG Post Order No. 35-19/9GSB-III dated 2.4.1990:
(i). The account opened earlier will get the existing scheme rate.
(ii). The second account (opened after the first account) will receive the prevailing POSA (Post Office Savings Account) rate plus 2% on the outstanding amount.
(iii). Points (i) and (ii) will be subject to the following conditions:
(a). The cumulative deposit in both the accounts should not exceed the applicable deposit limit for each year.
(b). The excess deposit (if any) will be refunded to the investor without any interest.
(iv). Points (i) to (iii) are in the nature of one-time special dispensation given to the investors of NSS-87 from the date of OM dated 12th July 2024 issued by the Ministry of Finance till 30th September 2024.
(v). Both the accounts will receive zero interest from 1st October 2024.
(b). Two NSS-87 accounts opened after DG Post Order No. 35-19/90-SB-III dated 2.4.1990:
(i). The first account opened will get the prevailing scheme rate.
(ii). The second account (opened after the first account) will get the prevailing POSA rate on the outstanding amount.
(iii). Pointers (i) and (ii) are subject to the following conditions:
(a). The cumulative deposit in both the accounts should not exceed the applicable deposit limit for each year.
(b). The excess deposit (if any) will be refunded to the investor without any interest.
(iv). Points (i) to (iii) are in the nature of one-time special dispensation given to the investors of NSS-87 from the date of OM dated July 12, 2024 issued by the Ministry of Finance till September 30, 2024.
(v). Both the accounts will get zero per cent interest from October 1, 2024.
(c). In case of more than two NSS-87 accounts:
The rules mentioned for two accounts opened before/after DG Post Order No. 35-19/90-SB-III dated 2.4.1990 will apply. No interest will be paid for the third account or more irregular accounts. The principal will be refunded to the investor.
2. PPF account opened in the name of minor
(a). POSA interest will be paid for such irregular accounts till the person (minor) becomes eligible to open the account i.e. till the person attains the age of 18 years. Thereafter, applicable interest rate will be paid.
(b). The maturity period for such accounts will be calculated from the date when the minor attains majority i.e. the date when the person becomes eligible to open the account.
3. More than one PPF accounts
(a). The primary account will receive scheme rate provided the deposit is within the applicable limit for each year. (Primary account is one of the two accounts chosen by the investor in any post office/agency bank where the investor prefers to continue the account on regularization).
(b). The balance of the second account will be merged with the first account, provided the primary account remains within the appropriate investment limit each year. After merger the primary account will continue to enjoy the prevailing scheme rate of interest. The balance amount in the second account, if any, will be refunded with zero per cent interest rate.
(c). Any additional account other than the primary and the secondary account will earn zero per cent interest from the date of opening of that account.
4) Extension of PPF account on behalf of NRI
Only for PPF accounts of active NRIs opened under the Public Provident Fund Scheme (PPF), 1968, where Form H did not specifically ask for the residential status of the account holder, the account holder (Indian citizen who became an NRI) will be given POSA interest rate.
5) Small savings account opened in the name of minor (except PPF and SSY)
Such irregular accounts can be regularized with simple interest. The interest rate for calculating simple interest on the account should be the prevailing POSA rate.
6) Regularization of Sukanya Samriddhi Account (SSA) opened on behalf of grandparents other than guardian
(a). In case of accounts opened under the guardianship of grandparents (who are not legal guardians), the guardianship shall be transferred to the person entitled under the law, i.e., natural guardian (surviving parent) or legal guardian.
(b). If more than two accounts are opened in a family in violation of Para 3 of Sukanya Samriddhi Account Scheme, 2019, the irregular accounts shall be closed treating them as accounts opened in violation of the scheme guidelines.
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