The Department of Economic Affairs under the Ministry of Finance has issued new guidelines concerning Public Provident Fund (PPF) accounts for minors, multiple PPF accounts, and the extension of PPF accounts by Non-Resident Indians (NRIs). These revisions, part of the National Small Savings (NSS) schemes administered through post offices, will take effect from October 1, 2024.
The changes
For PPF accounts opened in the name of minors, the account will accrue Post Office Savings Account (POSA) interest until the minor reaches 18 years of age. After this point, the applicable interest rate of the PPF scheme will be applied. The maturity period for such accounts will be recalculated from the date the minor becomes an adult, marking the start of eligibility for opening the account independently.
In cases where an individual holds more than one PPF account, the investor must choose a primary account. This primary account will continue to earn the scheme’s interest rate, provided the deposit stays within the annual ceiling. The balance from the second account will be merged with the primary account, maintaining the scheme’s interest rate. Any excess balance beyond the allowed limit in the second account will be refunded at a zero percent interest rate. Other PPF accounts held by the individual will not earn any interest from the date they were opened.
For NRIs who have PPF accounts opened under the Public Provident Fund Scheme, 1968, and where Form H did not ask for the account holder’s residency status, the account will earn POSA interest until September 30, 2024. From October 1, 2024, these accounts will receive zero percent interest.
