PPF New Rule: The Finance Ministry has issued a new guideline regarding PPF account. Under the guidelines issued by the Department of Economic Affairs, now the interest on the PPF account of a minor will be given as much as the savings account, until he becomes an adult.
PPF interest rate cut: You must have opened an account in Public Provident Fund (PPF). Till now you used to get double benefit in this account. Firstly, you used to get full interest by opening it in your name and secondly, you used to get interest by opening an account in the name of your minor child. But, today i.e. from October 1, 2024, the government has stopped this dual benefit on PPF account. Now if you have opened an account in the name of the child, then you will not get PPF interest till he/she turns 18 years of age.
If you look at the guidelines issued by the Department of Economic Affairs of the Ministry of Finance, it is known that the new rule on PPF has come into effect from October 1. This will not only affect the accounts of minors, but NRIs will also have to follow the new rule on PPF account. The new rule also applies to more than one account opened by you. We are telling you about all these types of effects one by one.
What has changed in the rules for minor accounts?
The biggest update related to PPF has been done regarding minor accounts. If you have opened a PPF account in the name of a child below 18 years of age, then now the government will not give the full interest of PPF on it. Let us tell you that currently 7.1 percent interest is being given on PPF. Under the new rule, till the minor completes 18 years of age, this account will be given the same interest as the post office savings account, which is currently 4 percent. After completing 18 years of age, the entire control of the account will come to the child and then 7.1 percent or whatever the PPF interest is, will be given on it.
Maturity period changed
The government has released another update regarding the PPF account of minors. Under the new guidelines, now the maturity date of the PPF account opened in the name of the minor will be counted from the day he becomes an adult i.e. the day he completes 18 years. This change has been made so that after becoming an adult, one can manage his/her account well.
If you have more than one account then…
Another change related to PPF account has come into effect from today. If you have more than one PPF account then a new rule for calculating interest will be applicable on it. In this, only the account which has been opened earlier will be allowed to invest Rs 1.5 lakh annually and on this you will be given PPF interest i.e. 7.1 percent return. If the total balance of all the accounts is less than 1.5 lakh then the money of the remaining accounts will also be transferred to the primary account and interest will be given on it. But, if the total balance is more than 1.5 lakh then you will not get any interest on the additional amount. The special thing is that apart from the primary and secondary account, no interest will be given in any other account, no matter what your limit is.
Big blow to NRIs
The government has made a big change regarding the PPF account of NRIs. The new guideline states that if NRIs do not give clear information about citizenship in their Form H, then no interest will be given on their accounts after September 30, 2024. Till then, they will get the same interest on PPF account as the post office savings account, which is 4 percent.
