Opening A PPF Account This Diwali? 3 New Rules You Should Be Aware Of

New Delhi: As Diwali 2024 approaches, those planning to invest in the popular Public Provident Fund (PPF) for financial security should be aware of some important new rules. Effective from October 1, 2024, the Ministry of Finance has implemented changes that affect interest rates and account regulations for both resident and non-resident investors.PPF is a low-risk savings scheme that offers steady returns and tax benefits, making it a preferred choice for many. However, the latest changes could impact how much interest you earn and which accounts are considered valid. Here’s what you need to know about the updated rules:

New PPF Rules Only One PPF Account Allowed Per ChildInvestors can now open just one PPF account per child. If additional accounts are opened, they’ll be treated as irregular and earn only a 4 per cent interest rate instead of the usual 7.1 per cent. Special Interest Rate For MinorsAccounts opened in a minor’s name will now earn the POSA interest rate (typically lower than the standard PPF rate) until the child reaches 18. After that, the account will switch to the current PPF interest rate.

Interest Changes For NRIsNon-Resident Indians (NRIs) who have not declared their status won’t earn the usual PPF interest. They’ll only receive POSA interest until September 30, 2024, and zero interest from October onward if they don’t declare their residency. Why Do These Changes Matter For Investors?The current PPF interest rate is 7.1 per cent per year, offering a blend of safety and tax-saving benefits as a debt-based instrument.