PPF and SSY Investor Alert : Know About Rule changes effective from October 1, 2024

The Ministry of Finance has announced certain changes to manage the irregular account relating to Sukanya Samriddhi Yojana (SSY), and Public Provident Fund (PPF) which will be applicable from October 1, 2024. As a woman, you might be investing in any of the above government schemes or saving for your child’s future, it’s important to stay updated on the changes made by the government and take necessary steps. Let’s get a detailed understanding of this update:

What are irregular accounts? 

Irregular accounts are those where the account holders have not deposited the yearly minimum required investment amount. For both PPF and SSY, there’s a minimum required investment amount of ₹500 and ₹250 respectively in a financial year.

What are the changes announced by the government?

Irregular Public Provident Fund Account opened under the name of minors: 

1. Interest applicable for Post Office Savings Bank Account will be paid for such irregular PPF accounts opened in the name of minors until the individual who is minor becomes eligible for opening of the account, i.e., when the individual attains 18 years of age. After that, the applicable interest rate of the scheme will be paid.
2. The maturity period for such accounts will be determined from the date the minor becomes an adult, i.e., the date from which the individual becomes eligible to open the account.

Irregularity in case of more than one PPF Account:

• The primary account will earn the scheme rate of interest as long as the deposit is within the applicable annual limit of ₹1.5 Lakhs. Now, what’s a primary account? It’s one of the two accounts selected by the investor in any Post Office/Agency Bank to keep the account after regularisation.
• The balance in the first account would be merged with the primary account, considering it is within the annual deposit limit of ₹1.5 Lakhs. After combining the two accounts, the primary account will continue to earn the scheme rate of interest, however, any excess amount in the second account will be repaid with 0% interest rate. 
• Any accounts, apart from the primary and second account shall earn 0% interest rate from the date of account opening. 

Irregularity in the extension of the PPF account by NRI:

• For only those active Non-Resident Indian’s PPF accounts opened under the Public Provident Fund Scheme (PPF), 1968, where Form H did not specifically ask for the residency status of the account holder, Post Office Savings Account interest rate shall be given to the account holder (here, it’ll be an Indian citizen who became NRI during the currency of Account) till 30th September 2024. After that, the said account shall earn 0% interest.

Irregularity in the Small Savings Scheme Account for Minors: 

• Irregular small savings scheme accounts opened under the name of a minor may be regularised with simple interest and the rate of interest will be as per the Post Office Savings Account interest rate and be calculated as per simple interest.

Sukanya Samriddhi Accounts opened by grandparents, other than legal guardian:

• When an account is opened under the guardianship of grandparents (who are not the legal guardians), the guardianship will be transferred to the natural guardian (the parent who is still alive) or the legal guardian, whichever is entitled under the applicable laws.

Are These Changes Applicable to All Accounts?

No, these rules are applicable to irregular accounts, those where minimum deposits were not made in a financial year.

The regular accounts, where the deposits are made on time each year are not impacted and will continue to receive the interest rates as usual. 

These rules aim to regularise the savings scheme offered by the government and encourage regular and timely deposits by investors for their future. 

As a woman, to be financially secure, it’s important to stay updated, and invest regularly toward your financial goals. Because with discipline, you maximize your returns and make the most of your investment experience. If you’re to investing, you can explore expert-curated Mutual Fund Portfolios on the Lxme App and start your journey with just Rs.100/-. Start today and become a smart investor.