PPF Alert: Major Rule Changes Effective October 1, 2024—What Investors Need to Know!
The Public Provident Fund (PPF) is one of the most popular investment schemes in India. Starting October 1, 2024, several crucial changes will be implemented regarding PPF regulations. If you have a PPF account or are considering investing in one, it's essential to understand these changes.
Key Changes to PPF Rules from October 1, 2024
The upcoming adjustments will affect not only minor account holders but also general investors and NRIs. The government's amendments to the scheme can be categorized into three main areas: changes for minors, regulations for multiple accounts, and provisions for NRIs.
Changes for Minors
A significant adjustment will impact the interest earned on PPF accounts held by individuals under the age of 18. Until the account holder reaches the age of 18, the interest will be calculated based on the rates applicable to the Post Office Savings Account. Currently, the interest rate for Post Office Savings Accounts is set at 4% annually, whereas PPF accounts earn an annual interest rate of 7.1%. Additionally, the calculation for the maturity of the PPF account will begin only after the account holder turns 18.
Regulations for Multiple Accounts
If you hold multiple PPF accounts, be aware that the funds in your secondary account will now be transferred to your primary account. You will earn interest at the rate of 7.1% annually on the primary account balance, provided that the total annual deposit does not exceed ₹1,50,000. No interest will be paid on any account other than the primary one.
Changes for NRIs
For NRIs, there will also be significant updates regarding the interest applicable to PPF accounts. If an NRI has opened a PPF account under the Public Provident Fund Scheme 1968 and has not submitted Form H (which verifies the account holder's residential status), they will not receive any interest on the deposited funds starting October 1, 2024.
These changes are essential for anyone involved with the PPF scheme, and it’s advisable to stay informed to make the most of your investments.
