Post Office Scheme Rules Changed: What All Has Changed In Small Savings Schemes In 2023; Details Inside

Centre has introduced certain changes in the small savings schemes in the year 2023. In its revision to the existing small saving schemes, the government has rolled out a new scheme, raised investment limits on a few, changes in interest calculation etc. In this article, we will see what has changed in small saving schemes in 2023.

Mahila Samman Savings Certificate - New limited period scheme introduced

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

Post Office Monthly Income Scheme - Limit Raised

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

Maximum Investment Amount In Senior Citizen Savings Scheme (SCSS) Raised

The maximum investment amount in the senior citizen savings plan (SCSS) has been raised from Rs 15 lakh to Rs 30 lakh. As a result, senior people will get a higher interest rate on their savings and will be able to make bigger deposits into their SCSS accounts.

PPF premature interest calculation has also changed. After the revision, your account will get an interest 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 there is a premature withdrawal of a deposit in a five-year account after four years, interest at the Post Office Savings Account rate of 4% will be paid now.

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

Changes In the Senior Citizen's Savings Scheme (SCSS)

1. Extended periods for investing in retirement benefits
A retired person who is above 55 but less than 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 as per the new regulations.

Scope of retirement benefits defined

The scope of retirement benefits has been clearly 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

According to the new rules, 1% of the deposit will be deducted if the account is closed before the expiry of 1-year of the investment.

No limit on the extension of SCSS

Account holders can now extend the account for any number of blocks, with each block lasting three years. Earlier, the extension was allowed only once.

Interest on the 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.

In case the SCSS account gets extended on maturity, the deposit will earn the interest rate applicable to the scheme on the date of maturity or on the date of the extended maturity, as per the new rules.

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."

The government currently offers nine small savings schemes, including the Public Provident Fund (PPF), Sukanya Samriddhi Yojana, Senior Citizen's Savings Scheme (SCSS), Post Office Monthly Income Scheme (POMIS), National Savings Certificate (NSC), Kisan Vikas Patra (KVP), Post Office Time Deposit (POTD), Atal Pension Yojana (APY), and Pradhan Mantri Vaya Vandana Yojana (PMVVY).