New Rules for Small Savings Schemes from October 1, 2024

Several rules regarding National Small Savings Schemes (NSS) through Post Offices will change next month. The Department of Economic Affairs (DEA) has issued new guidelines on August 21 for regularizing irregular accounts in these schemes.

1. Irregular NSS Accounts

For Two NSS-87 Accounts Opened Before April 2, 1990:

• The first account will earn the current scheme rate.
• The second account will earn the current POSA rate plus 2% on the balance.
• Both accounts must not exceed annual deposit limits, or excess funds will be refunded without interest.
• From October 1, 2024, both accounts will earn zero percent interest.

For Two NSS-87 Accounts Opened After April 2, 1990:

• Similar rules apply: the first account earns the scheme rate, and the second earns the POSA rate.
• The same deposit limits and refund conditions apply.
• From October 1, 2024, both accounts will also earn zero percent interest.

For More Than Two NSS-87 Accounts:

• The same rules apply for the first two accounts, but any additional accounts will not earn interest and will have the principal refunded.

2. PPF Accounts for Minors

• If a PPF account is opened for a minor, it will earn POSA interest until the minor turns 18. After that, the applicable interest rate will apply.
• The maturity period will start when the minor becomes an adult.

3. Multiple PPF Accounts

• The primary PPF account will earn the scheme rate as long as deposits are within annual limits.
• The second account’s balance will be merged with the primary account. Excess amounts will be refunded with zero percent interest.
• Any additional accounts beyond the first two will earn zero percent interest.

4. PPF Extension for NRIs

• Active NRI PPF accounts that did not specify residency will earn POSA interest until September 30, 2024. After that, they will earn zero percent interest.

5. Small Savings Accounts for Minors (Excluding PPF and SSA)

• Irregular accounts can be regularized with simple interest based on the current POSA rate.

6. Sukanya Samriddhi Account (SSA) Regularization

• If grandparents (not legal guardians) opened SSA accounts, guardianship must be transferred to the legal guardian (alive parents).
• If more than two accounts were opened in violation of SSA rules, the extra accounts will be closed.

The circular states that all Post Offices must collect PAN and Aadhaar details of account holders or guardians if not already done. They should also inform account holders about these new guidelines and actively track cases needing regularization to minimize inconvenience.