What You Should Do:
Account holders should review their accounts to ensure compliance with these new rules. If you hold multiple PPF accounts or are an NRI, take the necessary steps to consolidate or regularize your accounts to avoid potential loss in earnings
The Indian government has introduced significant updates to the Public Provident Fund (PPF) rules, effective from October 1, 2024. These changes affect PPF accounts held by minors, individuals with multiple accounts, and NRIs. Here’s a breakdown of the key updates.
NRIs and PPF
- The changes also target NRI PPF account holders. From October 1, 2024, NRIs will no longer earn interest on their PPF accounts, though they can keep the accounts until maturity
- Additionally, NRIs are not permitted to extend their PPF accounts beyond the initial 15-year term
- For those who previously extended their accounts, the accounts will be considered irregular and will not earn any interest after September 30, 2024
Changes for Minor PPF Accounts
From now on, PPF accounts opened for minors will earn interest at the Post Office Savings Account (POSA) rate of 4% until the minor turns 18. Once the minor reaches adulthood, the account will start accruing interest at the regular PPF rate, currently 7.1%. The account’s maturity period will begin from the date the minor turns 18. Additionally, only one PPF account is allowed per minor; any duplicate accounts will not earn interest.
Impact on Multiple PPF Accounts
The new rules discourage holding multiple PPF accounts. If an individual holds more than one PPF account, only the primary account will earn interest at the scheme rate. Secondary accounts will not earn interest unless merged with the primary account by the December 12, 2019, deadline. Any balance exceeding the Rs 1.5 lakh annual limit will be refunded without interest.
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