The Public Provident Fund is the backbone of many working-class salaried professionals in the country. Therefore, every systemic or normative change created results in monumental changes across the board.
The Ministry of Finance's Department of Economic Affairs, the ministry responsible for the system, recently included new rules to the system.
These new rule changes touch upon aspects of the name of minors, individuals holding multiple PPF accounts. In addition, it also talks about NRIs extending their PPF accounts through post offices under the National Small Savings (NSS) schemes and issue of multiple PPF accounts.
The investor selects two accounts from any Post Office or agency bank, and following regularisation, the principal account is the one they choose to keep. |
Multipe PPF Accounts
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In the case of the existence of multiple PF accounts, the scheme rate of interest will be earned on the primary account. This would depend on whether the deposit does not exceed the yearly limit.
The investor selects two accounts from any Post Office or agency bank, and following regularisation, the principal account is the one they choose to keep.
In addition, if the primary account remains below the required investment limit each year, the second account's balance will be combined with it. Following the merger, the primary account will continue to earn the prevailing scheme rate of interest. The second account's excess balance will be repaid with no interest.
For NRI PPF accounts that are active and opened under the Public Provident Fund Scheme (PPF), 1968. |
PPF For NRIs
For NRI PPF accounts that are active and opened under the Public Provident Fund Scheme (PPF), 1968. Here, the Form H did not explicitly enquire about the account holder's residency status; the account holder will receive a POSA rate of interest until September 30, 2024.
After 30 September, the aforementioned account will not receive any interest.
Account For Minors
Finally, we come to PPF for minors, for PPF accounts formed in the name of a minor, the interest rate applicable to a Post Office Savings Account (POSA) will be paid until the minor reaches the age of 18.
After crossing the age of 18, and becoming an 'adult', the holder can start a regular account of their own. Thereafter, the usual PPF interest rate will apply to the account in question.
The circular announcing these changes was issued on August 21. These new set of regulations will come into effect on October 1.
