Beginning October 1, 2024, significant changes will be implemented for Post Office small savings accounts under the National Small Savings (NSS) schemes. If you currently have one of these accounts, it’s essential to be aware of how these updates may affect your savings and be informed about the critical changes.
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For NSS-87 Accounts
Accounts Opened Before April 2, 1990:
First Account: Will continue to earn interest at the current scheme rate.
Second Account: Will earn interest at the prevailing Post Office Savings Account (POSA) rate plus an additional 200 basis points (2 per cent) on the outstanding balance.
Conditions:
The total deposits in both accounts must not exceed the annual deposit limits. Any deposits beyond these limits will be refunded without interest.
Important Note: This arrangement is a one-time special provision, valid until September 30, 2024. After this date, both accounts will earn zero interest starting October 1, 2024.
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Accounts Opened After April 2, 1990:
First Account: Interest will be earned at the current scheme rate.
Second Account: Will earn interest at the prevailing Post Office Savings Account (POSA) rate on the outstanding balance.
Conditions:
The total deposits across both accounts must not exceed the annual deposit limits. Any excess deposits will be refunded without interest.
Important Note: This arrangement is also a one-time special provision, valid until September 30, 2024. After this date, both accounts will earn zero interest starting October 1, 2024.
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More Than Two NSS-87 Accounts
If you have more than two NSS-87 accounts, the same rules for two accounts will apply:
Additional Accounts: For the third account and any subsequent accounts, no interest will be paid, and only the principal amount will be refunded to the investor.
What Does This Mean for Investors?
If you have irregular NSS accounts, these changes may affect your earnings. The new regulations highlight the need to regularise your accounts before October 1, 2024, to avoid losing interest income.
Investors should take this opportunity to reassess their savings strategies and explore alternative investment options to ensure the continued growth of their savings.
