The new rules for PPF (public Provident Fund) and SSY (Sukanya Samriddhi Yojana) accounts effective from October 1, 2024.
Sukanya Samriddhi Account is a Government of India-backed savings plan for parents of girl children. The plan encourages parents to save aside funds for their female child’s future education.
New rules limit minors to one PPF account, excluding joint accounts. Multiple accounts result in reduced interest rates until minor becomes an adult, with joint accounts not allowed. That means any additional PPF accounts beyond the primary and second accounts will earn a zero percent interest rate.
To avoid account closures or penalties, it is crucial to limit SSY accounts to two for two children within a family.
The key points are:
1.More than one minor account: Only one PPF account can be opened in the name of a minor, and joint accounts are not allowed. If multiple accounts have been opened, the interest rate will be reduced to the post office savings account rate until the minor becomes an adult.
2. More than one PPF account: The primary PPF account will earn the scheme rate of interest, subject to the deposit being within the annual ceiling of Rs. 1.5 lakh. The interest rate on any additional accounts beyond the primary and second accounts will be 0%.
Also Read: What is the Sukanya Samriddhi Yojana, and why should we invest in equity funds?
3. Extension of PPF account by NRI: If a PPF account is extended using Form H, but the account holder has become an NRI (Non-Resident Indian), the account will earn the post office savings account interest rate until September 30, 2024, and then no interest after that.
4. SSY accounts opened by grandparents: If SSY accounts are opened by grandparents who are not the legal guardians, the guardianship will be transferred to the natural guardian (alive parents) or legal guardian.
5. More than two SSY accounts: If more than two SSY accounts are opened within a family, the irregular accounts will be closed and treated as accounts opened in contravention of the scheme guidelines