The rules of some accounts under the Small Savings Scheme are going to change from October 1. This change will be made under PPF, Sukanya Samriddhi and other schemes. The Department of Economic Affairs of the Finance Ministry has issued a guideline regarding accounts opened under the small savings scheme through post offices. Complete information has been given in the guideline to regularize the account. Along with this, interest and maturity for the accounts have also been changed.Has been made clear.
In this guideline, information has also been given regarding the Public Provident Fund (PPF) opened in the name of a minor. Regarding minor PPF accounts, it has been said that these irregular accounts will get interest like Post Office Savings Accounts (POSA), but when the minor turns 18 years old, this account will become eligible for regularization, that is, then interest will be given according to the interest rate applicable on PPF.Moreover, the maturity period of such accounts will be calculated from the date the minor attains majority. This means that the period for which the account has been active will be considered from the date on which the person becomes eligible to open a regular account.
What does irregular accounts mean?
According to Business Today, Saraswathi Kasturirangan, partner at Deloitte India, says that PPF accounts can be opened for minors. However, only Indian residents are eligible to open PPF accounts. Moreover, PPF accounts for minors can only be opened and managed by one of the parents or legal guardians.
Why is this change in the rules happening?
These changes have been made regarding small savings scheme and PPF to ensure that these schemes and accounts are regulated and to prevent opening of accounts which are not in accordance with the guidelines. Investors have to ensure that they are complying with the guidelines of the scheme. The aim of the guideline is to provide clarity and put in place a fair and correct order for the regularization of irregularly opened small savings accounts.
What will be the rule if you have more than one PPF account?
If someone has more than one PPF account, the primary account will get interest as per the scheme provided the deposit amount is within the maximum limit applicable for each year. The balance amount in the second account will be merged with the first account provided the primary account remains within the estimated investment limit each year. After the merger, the primary account will continue to get the prevailing scheme rate or interest. On the other hand, if there is a third account, then it will get zero percent interest rate from the date of opening the account.
