Post office schemes new rules 2023: Major changes made to PPF, POTD, POMIS, Senior Citizens Savings Scheme, other small savings schemes

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The government has made various changes under small savings schemes in the year 2023. The government has introduced a new scheme, increased investment limits on certain schemes, changes in interest calculation etc,. Here we have listed some of the major and important changes made by the government.

Post office schemes interest rate 2023: Which small savings scheme offers highest interest rate

List of small savings schemes offered by India Post

1. Post Office Savings Account(SB)
2. National Savings Recurring Deposit Account(RD)
3. National Savings Time Deposit Account(TD)
4. National Savings Monthly Income Account(MIS)
5. Senior Citizens Savings Scheme Account(SCSS)
6. Public Provident Fund Account(PPF )
7. Sukanya Samriddhi Account(SSA)?
8. National Savings Certificates (VIIIth Issue) (NSC)
9. Kisan Vikas Patra(KVP)
10. Mahila Samman Savings Certificate.

Launch of new limited period scheme

The Mahila Samman Savings Certificate was introduced in Budget 2023 for female investors. This is a one-time small savings scheme that will be offered for two years. The maximum deposit amount for the Mahila Samman Savings Certificate is Rs 2 lakh. The scheme has a two-year term i.e., up to March 2025 and a 7.5 percent annual interest rate, with the option of partial withdrawal.

Post Office Monthly Income Scheme limit increased

The limit for single account users under the Post Office Monthly Income Scheme (POMIS) has increased from Rs 4 lakh to Rs 9 lakh and the maximum for joint holding has been raised from Rs 9 lakh to Rs 15 lakh, was made Budget 2023 announcement.

Senior Citizen Savings Scheme (SCSS)

The maximum amount that may be invested in the senior citizen savings plan (SCSS) has been increased by the FM from Rs 15 lakh to Rs 30 lakh. This was announced during the budget 2023. As a result, senior people will be eligible for a greater interest rate on their savings and be able to make larger deposits into their SCSS accounts.
PPF premature interest calculation changed

Earlier rule; “Provided further that on such premature closure, interest in the account shall be allowed at a rate which shall be lower by 1% than the rate at which interest has been credited in the account from time to time since the date of opening of the account, or the date of extension of the account, as the case may be”

What has changed: In the Public Provident Fund Scheme, 2019, in paragraph 13, in the second proviso, for the words “or the date of extension of the account”, the words “or from the date of commencement of the current block period of five years” shall be substituted, as per the Department of Post notification.

This implies that interest will be permitted in the account at a rate that is 1% lower than the interest that has been credited to the account on a regular basis since the start of the current block period of five years.

Premature withdrawal penalty of post office FD

If a deposit in a five-year account is withdrawn prematurely after four years, interest at the Post Office Savings Account rate of 4% will be paid now.

Previously, if a five-year time deposit account is closed after four years from the date of deposit, interest will be calculated using the rate applicable to three-year time deposit accounts.

Changes Senior Citizen’s Savings Scheme (SCSS)

1. Extended periods for investing retirement benefits
A retired person who is above 55 but under 60 years old would now receive three months instead of one month.
2. Investment made by a government employee’s spouse
The financial aid amount may now be invested in the program by a government employee’s spouse according to the new regulations.

Scope of retirement benefits defined
As per the notification, retirement benefit means any payment received by the individual due to retirement or superannuation. This includes provident fund dues, retirement or superannuation or death gratuity, commuted value of pension, leave encashment, savings element of group savings linked insurance scheme payable by the employer on retirement, retirement-cum-withdrawal benefit under Employees’ Pension Scheme (EPS) and ex gratia payments under a voluntary or special voluntary retirement scheme.”

Deduction on premature withdrawal

As per the new rules, one percent of the deposit will be deducted if the account is closed before the expiry of one year of the investment.

No limit on the extension of SCSS

The account holder can continue to extend the account for n number of block – the block being of three years each. Further, the application has to be submitted for every extension. Earlier, the extension was allowed only once.

Interest on extension of scheme deposit

As per the new rule, in case the SCSS account gets extended on maturity, the deposit will earn an interest rate applicable to the scheme on the date of maturity or on the date of extended maturity.

Maximum deposit amount

As per the notification, “The deposit made at the time of opening of account shall be paid on or after the expiry of five years or after the expiry of each block period of three years where the account was extended under paragraph 8 from the date of opening of account. Provided that after the closure of the existing account or accounts, new accounts or accounts may be opened again as required by the depositor subject to the maximum deposit limit.”



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