The Department of Economic Affairs of the Ministry of Finance has issued new rules regarding the National Small Savings (NSS) schemes opened through post offices. These rules are to regularize the accounts opened irregularly under these schemes.
The new rules will come into effect from October 1, 2024. According to the circular issued, 6 categories have been identified under the schemes, for which guidelines have been issued. These 6 categories and guidelines are as follows-
NSS-87 accounts
Accounts opened before April 2, 1990: The current scheme rate will apply to the first account. The balance in the second account will earn the current Post Office Savings Account (POSA) rate plus 2% interest. From October 1, 2024, both accounts will earn 0% interest.
Accounts opened after April 2, 1990: The current scheme rate will apply to the first account. The current POSA rate will apply to the second account. Both accounts will get 0% interest from October 1, 2024.
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More than 2 accounts: No interest will be paid on third and additional accounts. Principal amount will be refunded.
Public Provident Fund (PPF) accounts
Accounts opened in the name of a minor: POSA interest will be available till the minor turns 18. After that, the interest rate applicable for PPF will apply. Maturity will be calculated from the 18th birthday of the minor.
More than one PPF account: If the deposit amount is within the annual limit, the primary account will be charged the prevailing rate for the scheme. The balance of any secondary account will be merged with the primary account. The excess amount will be refunded with 0% interest. More than two additional accounts will earn 0% interest from the date of their opening.
Extension of PPF accounts by NRIs
Active NRIs who have PPF accounts that do not require residency details will receive POSA interest until September 30, 2024. After this date, the interest will be 0%.
Sukanya Samriddhi Accounts
In case of accounts opened by grandparents (not legal guardians), guardianship will have to be transferred to the legal guardian or biological parents.
If more than two accounts are opened in violation of the scheme guidelines, the additional accounts will be closed.
Accounts opened in the name of minor: Irregular accounts can be regularized with simple interest at prevailing POSA rate.
Important instructions to post offices
Verification: All post offices have been directed to collect PAN and Aadhaar details from the account holders or guardians, if not already available. Also, the system has to be updated before submitting the regularization request.
Post offices will have to inform account holders about these changes and guide them on how to comply with the rules.
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