The Department of Economic Affairs, under the Ministry of Finance, issued new directives for PPF Accounts and NSS Accounts, vide a circular on August 21. Certain changes, as announced in the Circular, will take effect from October 1, 2024.

NSS Accounts to be Defunct

The Government has decided to discontinue the National Saving Scheme (NSS), which was a popular small-savings scheme. All NSS Accounts will be subject to Zero Interest post October 1, which is equivalent to being shutdown. If there are multiple NSS accounts being held by an investor, the total will be subject to the limits and all accounts apart from the primary will be merged with primary account and balance will be returned. The primary account will earn the normal interest till September 30. The Secondary Accounts will earn PoSA rates plus 200 basis points from July 12 till September 30. After October 1, the accounts will be merged, balance shall be returned and the remaining balance will earn NO INTEREST. 

Multiple PPF Accounts

As per the PPF Rules amaneded in 2020 (original 2019) an individual can open ONLY ONE PPF account in their own name. If they are found to have two accounts, one will be designated as Primary and the other as Secondary. On October 1, the amount from the Secondary account will be transferred to the Primary Account. The maximum an individual can deposit in PPF Account is Rs 1.5 Lakh, for a period of 15 Years. Any amount in excess in the Secondary Account, will be paid back to the Account Holder, sans Interest (Zero Interest after July 12, 2024). If an individual is found to be having more than two accounts, all the interest earned on the account apart from Primary and Secondary, will bef disallowed and the principal deposit will be returned to the Account Holder.

Minor PPF Accounts

Individuals are allowed to open One PPF Account in the name of Minors as well. If multiple Minor accounts in the name of the same Minor are opened by an individual, they will be treated as Irregular accounts. Though the Accounts will not be closed, one Account will be treated as Primary and will continue to earn the prevailing Interest Rates on PPF, the other account will earn the Post Office Saving Account Interest Rate, both till the child turns 18. Once the child turns 18, the irregular account will be treated as a Secondary Account.

NRI cannot have a Resident PPF Account

NRIs who have not disclosed their change in NRIs are allowed to operated PPF accounts, IF they had begun a PPF Account when they were Resident Indians and subsequently became NRIs. In such cases the Individual will continue to invest in the existing account till maturity and no extension will be granted thereafter (2018). Earlier (1997) NRIs were not allowed to operate PPF accounts and the accounts will be closed when they change status from Resident to NRI. PoSA rates will be paid from date of change in status till date of closing of account. As per the latest rules NRIs who have not disclosed their NRI status, will be given PoSA interest from Jul 12 till Sept 30, 2024 post which there will be no Interest on their deposits.

Grandparents cannot open SSAS

Grandparents to a girl child cannot open a Sukanya Samridhi Account (SSAS) if they are not the legal guardians of the beneficiary. For all such accounts operative currently, they will be transferred under the name of the legal guardian or the parent of the beneficiary girl child. SSAS account can be opened by the parent or legal guardian of a girl child under 10yrs of age and the account matures when the girl turns 18.