The Ministry of Finance has issued new guidelines to regularize irregular accounts across various National Small Savings Schemes (NSS). These updates, announced in a circular from the Department of Economic Affairs on August 21, 2024, apply to accounts such as the NSS-87, Public Provident Fund (PPF) for minors, and Sukanya Samriddhi Accounts (SSA). All post offices and financial institutions are expected to comply with these procedures to ensure smooth and efficient management of these accounts.
Categories of Irregular Accounts
The updated guidelines focus on the following six categories of irregular accounts:
- NSS Accounts (Before and After April 2, 1990)
- Before April 2, 1990: The first account receives the prevailing scheme interest rate, while the second account earns a higher rate. Both accounts must not exceed the annual deposit limits.
- After April 2, 1990: The first account will receive the prevailing scheme rate, and the second will earn a standard rate. Both accounts must adhere to the deposit limits.
- From October 1, 2024: All such accounts will earn zero interest.
- PPF Accounts Opened in the Name of a Minor
- These accounts will earn interest at the Post Office Savings Account (POSA) rate until the minor reaches the age of 18. Afterward, they will earn the applicable scheme interest rate.
- Multiple PPF Accounts
- The primary PPF account will earn interest at the scheme’s prevailing rate, while excess balances in any secondary PPF accounts will earn zero interest.
- PPF Accounts for NRIs
- If the account holder becomes a Non-Resident Indian (NRI) during the account’s term, POSA interest will be given until September 30, 2024. After that date, the account will earn zero interest.
- Sukanya Samriddhi Accounts Opened by Non-Legal Guardians
- These accounts will earn simple interest at the POSA rate. Guardianship will be transferred to the legal guardian, and any additional accounts opened within the same family will be closed.
Key Dates and Compliance Requirements
- October 1, 2024: Accounts not regularized by this date will earn zero interest.
- Transfer of Guardianship: For irregular Sukanya Samriddhi Accounts, guardianship will be officially transferred to the legal guardian.
- Account Closures: Excess accounts in families, especially under the Sukanya Samriddhi scheme, will be closed as part of the regularization process.
Summary
The updated guidelines aim to streamline the management of irregular accounts under various National Small Savings Schemes, ensuring that deposit limits are respected and appropriate interest rates are applied. These rules are mandatory for all relevant institutions, with a focus on compliance by October 1, 2024, to avoid loss of interest.
Multiple-Choice Questions (MCQs):
- Which Ministry has issued updated guidelines for irregular accounts under National Small Savings Schemes?
a) Ministry of Commerce
b) Ministry of Finance
c) Ministry of Home Affairs
d) Ministry of External Affairs
Answer: b) Ministry of Finance - When was the Department of Economic Affairs circular regarding updated guidelines released?
a) August 15, 2024
b) August 21, 2024
c) September 1, 2024
d) October 1, 2024
Answer: b) August 21, 2024 - What interest rate will irregular NSS accounts earn from October 1, 2024?
a) Prevailing scheme rate
b) Zero interest
c) POSA interest rate
d) Higher interest rate
Answer: b) Zero interest - What happens to the interest rate for PPF accounts opened in the name of a minor after the minor turns 18?
a) They will continue earning POSA interest.
b) They will earn zero interest.
c) They will earn the applicable scheme interest rate.
d) They will be closed.
Answer: c) They will earn the applicable scheme interest rate. - What happens to Sukanya Samriddhi Accounts opened by grandparents who are not legal guardians?
a) They will be closed immediately.
b) They will earn zero interest.
c) Guardianship will be transferred to the legal guardian, and extra accounts will be closed.
d) They will earn a higher interest rate.
Answer: c) Guardianship will be transferred to the legal guardian, and extra accounts will be closed.