New PPF Guidelines Unveiled: 3 Major Rule Changes Starting October 1. All You Need To Know

New PPF Guidelines: The revised guidelines stipulate that Post Office Savings Account interest will be paid on irregular PPF accounts held by minors until they reach the age of 18. Find out more

New PPF Guidelines: The Department of Economic Affairs (DEA), under the Ministry of Finance, has introduced a series of new guidelines for Public Provident Fund (PPF) accounts. These changes, which will come into effect on October 1, 2024, will significantly impact accounts held by minors, Non-Resident Indians (NRIs), and individuals with multiple PPF accounts. The ministry has issued an official circular detailing these revisions.

Key Changes for PPF Accounts:

New Regulations for PPF Accounts Held by Minors

The revised guidelines stipulate that Post Office Savings Account (POSA) interest will be paid on irregular PPF accounts held by minors until they reach the age of 18.

Once the account holder turns 18, the standard PPF interest rate will apply.

The maturity period for these accounts will now begin from the date the minor becomes an adult, marking their eligibility to independently open and operate a PPF account.

Changes for Investors with Multiple PPF Accounts

Investors who hold more than one PPF account will see changes in how interest is accrued.

The primary account will earn interest at the current scheme rate, provided deposits remain within the annual limit.

Any balance in secondary PPF accounts will be merged with the primary account, as long as the combined total does not exceed the yearly investment ceiling.

After the merger, the primary account will continue to accrue interest at the scheme rate, while any excess balance in secondary accounts will be refunded without interest.

Extension of PPF Accounts by NRIs

The guidelines also address the status of PPF accounts held by Non-Resident Indians (NRIs).

Only active NRI PPF accounts opened under the Public Provident Fund Scheme (PPF), 1968, where Form H did not inquire about the account holder's residency status, will receive the POSA interest rate until September 30, 2024.

From October 1, 2024, these accounts will no longer accrue interest.

The Ministry of Finance advises all PPF account holders to review these new guidelines and ensure compliance to maximise the benefits of their investments.