Updated PPF Rules Starting October 1: Changes Affecting Minors, Multiple Accounts, and NRIs
Updated PPF Rules Starting october 1: Changes Affecting Minors, Multiple Accounts, and NRIs
The Public Provident Fund (PPF), known for its tax benefits, competitive interest rates, and guaranteed returns, is undergoing rule changes effective october 1, 2024. The Department of Economic Affairs at the Ministry of Finance recently issued updated guidelines affecting PPF accounts opened for minors, individuals with multiple PPF accounts, and Non-Resident indians (NRIs). The finance ministry’s circular, dated august 21, details these adjustments.
Key updates include:
PPF Accounts for Minors:
Interest will be paid at the Post office Savings Account (POSA) rate until the minor turns 18.
Upon reaching adulthood, the account will begin earning the standard PPF interest rate.
The account’s maturity period will be calculated from the date the account holder turns 18.
Multiple PPF Accounts:
Interest will be paid on the primary account up to the annual investment ceiling. The primary account is the one chosen to remain after regularization.
If the primary account's balance stays within the ceiling, the balance from a secondary account will be merged into it, continuing to earn the standard interest rate.
Interest will not accrue on any other accounts beyond the primary and secondary accounts from the day they are opened.
PPF Account Extension for NRIs:
Indian citizens who have become NRIs but did not update their residency status with Form H will receive POSA interest rates on their PPF accounts until september 30, 2024.
After this date, interest payments on these accounts will cease.
These changes aim to streamline and regulate PPF accounts more effectively, addressing irregularities and ensuring compliance with updated norms.
The Public Provident Fund (PPF), known for its tax benefits, competitive interest rates, and guaranteed returns, is undergoing rule changes effective october 1, 2024. The Department of Economic Affairs at the Ministry of Finance recently issued updated guidelines affecting PPF accounts opened for minors, individuals with multiple PPF accounts, and Non-Resident indians (NRIs). The finance ministry’s circular, dated august 21, details these adjustments.
Key updates include:
PPF Accounts for Minors:
Interest will be paid at the Post office Savings Account (POSA) rate until the minor turns 18.
Upon reaching adulthood, the account will begin earning the standard PPF interest rate.
The account’s maturity period will be calculated from the date the account holder turns 18.
Multiple PPF Accounts:
Interest will be paid on the primary account up to the annual investment ceiling. The primary account is the one chosen to remain after regularization.
If the primary account's balance stays within the ceiling, the balance from a secondary account will be merged into it, continuing to earn the standard interest rate.
Interest will not accrue on any other accounts beyond the primary and secondary accounts from the day they are opened.
PPF Account Extension for NRIs:
Indian citizens who have become NRIs but did not update their residency status with Form H will receive POSA interest rates on their PPF accounts until september 30, 2024.
After this date, interest payments on these accounts will cease.
These changes aim to streamline and regulate PPF accounts more effectively, addressing irregularities and ensuring compliance with updated norms.