It should be noted that the Ministry of Finance has the right to regulate small savings accounts.
If you are looking forward to investing in a post office small savings scheme or have already invested in PPF, SSY, NSS and others then there is good news for you. The Department of Economic Affairs, Ministry of Finance, has released new rules for irregularly opened accounts under National Small Savings (NSS) schemes. The circular was issued by the ministry on August 21.
It should be noted that the Ministry of Finance has the right to regulate small savings accounts. As per the circular, if any account is found irregular, then, it will be sent for regularisation in compliance with the established rules. Now, the department has issued six new rules for PPF, SSY, and NSS Schemes of the post office. These new rules will be effective from October 1.
Six categories have been identified and related guidelines have been issued. The major categories include– irregular NSS accounts, PPF accounts opened in the name of a minor, more than one PPF account, extension of PPF by NRIs and regularisation of Sukanya Samriddhi Account (SSA) opened by grandparents rather than guardians.
Irregular NSS Accounts
These have been categorised as
Two NSS-87 accounts were opened before DG order
Two NSS- 87 accounts were opened after DG order
More than two NSS-87 accounts
2 NSS-87 accounts opened before DG Post Order No. 35-19/9GSB-III dated 2.4.1990:
(i). The first account opened will get the prevailing scheme rate.
(ii). The second account (opened after the first account) will get the prevailing POSA (Post Office Savings Account) rate plus 2% on the outstanding amount.
(iii). Points (i) and (ii) are subject to the following conditions:
(a). The cumulative deposit in both accounts should not exceed the applicable deposit limit for each year.
(b). Excess deposit (if any) will be refunded to the investor without any interest.
(iv). Points (i) to (iii) are a one-time special dispensation given to NSS-87 investors from the date of OM dated July 12, 2024, issued by the Ministry of Finance till September 30, 2024.
(v). Both accounts will earn zero interest from 1st October 2024.
2 NSS-87 accounts opened after DG Post Order No. 35-19/90-SB-III dated 2.4.1990:
(i). The first account opened will earn the prevailing scheme rate.
(ii). The second account (opened after the first account) will earn the prevailing POSA rate on the outstanding amount.
(iii). Pointers (i) and (ii) are subject to the following conditions:
(a). The cumulative deposit in both accounts should not exceed the applicable deposit limit for each year.
(b). Excess deposit (if any) will be refunded to the investor without any interest.
(iv). Points (i) to (iii) are like a one-time special dispensation given to NSS-87 investors from the date of OM dated 12th July 2024 issued by the Ministry of Finance till 30th September 2024.
(v). From October 1, 2024, both accounts will get zero per cent interest.
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(c) In case of more than two NSS-87 accounts:
The rules mentioned in DG Post Order No. 35-19/90-SB-III dated 2.4.1990 will apply for 2 accounts opened before/after. No interest will be paid for the third account or more irregular accounts. The principal will be refunded to the investor.
PPF account opened in the name of a minor
POSA interest will be applicable till the minor turns 18 years old. Then the interest rate applicable for PPF will be applicable. Maturity will be calculated from the 18th birthday of the minor.
More than one PPF accounts
If the deposit amount is within the annual limit, the primary account will be charged the rate in effect for the scheme. The balance of any secondary accounts will be clubbed with the primary account. The excess amount will be refunded with 0 per cent interest. More than two additional accounts will earn 0 per cent interest from their opening dates.
Extension of PPF accounts by NRIs
Active NRIs holding PPF accounts that do not require residency details will get POSA interest till September 30, 2024. After this date, the interest will be 0 per cent.
Small savings account opened in the name of a minor (except PPF and SSY)
Such irregular accounts can be regularized with simple interest. The interest rate for calculating simple interest on the account should be the prevailing POSA rate.
Regularisation of Sukanya Samriddhi Account (SSA) opened by grandparents other than the guardian
(a). In case of accounts opened under the guardianship of grandparents (who are not legal guardians), the account shall be transferred to the person entitled under the law i.e. natural guardian (surviving parent) or legal guardian.
(b). If more than two accounts are opened in a family in violation of Para 3 of Sukanya Samriddhi Account Scheme, 2019, the irregular accounts shall be closed considering them as accounts opened in violation of the scheme guidelines.
