The Government of India has eased the rules for various small savings schemes, including the public provident fund (PPF) and the senior citizen’s savings scheme.
New norms for senior citizen’s savings scheme
- Under the new norms, individuals now have three months to open an account for the senior citizen’s savings scheme.
- An individual can initiate the process of opening an account under the senior citizen’s savings scheme within three months from the date of receiving the retirement benefits, along with providing proof of the date of disbursal of these benefits. Earlier it was a one-month timeframe.
- The deposit in an account opened under the senior citizen’s savings scheme will accrue interest at the rate applicable to the scheme on the date of maturity or the date of extended maturity.
New norms for Public Provident Fund (PPF)
- In the case of PPF, the notification has made some changes about the premature closure of accounts. This scheme may be called the Public Provident Fund (Amendment) Scheme, 2023.
- It outlines adjustments specifically related to premature withdrawals under the National Savings Time Deposit scheme.
New norms for National Savings Time Deposit scheme
- If a deposit in a five-year account is withdrawn prematurely after four years from the date of opening the account, the interest payable would be at the rate applicable to the Post Office Savings Account.
- As per the existing norms, if a five-year Time Deposit account is closed after four years from the date of deposit, a rate admissible for a three-year Time Deposit account would be applicable for the calculation of interest.
- A time deposit is an interest-bearing bank account that has a date of maturity. The money in a time deposit must be held for the fixed term to receive the interest in full.
About Small savings schemes
- Small savings schemes are investment options overseen by the Department of Economic Affairs (DEA) under the Union finance ministry.
- At present, the government provides nine types of small saving schemes; Recurring Deposit (RD), Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), Mahila Samman Saving Certificate, Kisan Vikas Patra, National Savings Certificate (NSC), and Senior Citizen Savings Scheme (SCSS).
