PPF, SSY, PO Deposits, Other Small Saving Schemes Accounts To Be Frozen By September 30; Here's Why

If you have an account in government-backed saving schemes aka small saving schemes, then you must remember to link your 12-digit biometric Aadhaar card with your account before this month's end. As per the Finance Ministry notification, if Aadhaar is not submitted or linked to small savings schemes, then the account will be frozen by September 30, 2023. Also, anyone who is investing in these schemes over a certain limit prescribed as per the guidelines, then investors must also submit their valid Permanent Account Number (PAN).

Some of the most popular small savings schemes are --- Post Office Savings Accounts (SB), 5-year Post Office Recurring Deposit Accounts (RD), 1-year to 5-year Post Office Time Deposits, Post Office Monthly Income Scheme Accounts (MIS), Senior Citizen Savings Scheme (SCSS), 15 year Public Provident Fund Account (PPF ), Sukanya Samriddhi Accounts, Kisan Vikas Patro, and Mahila Samman Savings Certificate, 2023 among others.

With effect from April 1, 2023, the FinMin earlier notified that PAN and Aadhaar numbers are now required to invest in these small saving schemes. The modifications were part of the Know Your Customers (KYC) process.

Earlier, investment in small saving schemes was allowed without the need to submit your Aadhar details. However, an individual, from April 1, 2023, is required to at least submit his or her Aadhaar enrolment number to invest in the government-backed small saving schemes.

But if the Aadhaar number or Aadhaar enrolment number is not submitted before September 30, 2023, end, then the small savings account of existing customers will be frozen from October 1, 2023.

Further, for new subscribers, if he or she is opening an account in a small savings scheme without an Aadhaar number, they must provide an Aadhaar number within six months from the date of the opening of the account. If Aadhaar is not seeded then their small savings account will be frozen after six months of the account opening.

If you're a new subscriber and opened your account on April 1, let's suppose, and failed to submit your Aadhaar number within six months, then your account will be frozen from October 1, 2023.

Aadhaar is also compulsory even if the small savings accounts are opened by children or in the name of minors.

Moreover, the ministry also made it mandatory to feed PAN numbers when new subscribers open their savings accounts. As per Clear, if they do not submit their PAN number at the time of account opening, they must submit it within two months of opening the account. Their accounts will be frozen when they do not submit PAN details within the deadline.

However, existing subscribers are required to submit their PAN in circumstances like --- small savings account balance is over Rs 50,000; where the total of all transfers and withdrawals in a month from the savings account shoots over Rs 10,000; and lastly when a total of credits in the savings account in respective financial year exceeds Rs 1 lakh.

With effect from July 1, 2023, Post Office Savings Account​​ offers a 4% rate, while 1-year time deposit offers a 6.9% rate, 2-year and 3-year time deposits give 7% rates each, and 5-year time deposits offer a 7.5% rate. Meanwhile, a 6.5% rate is applicable on 5 Year Recurring Deposit Scheme​, 8.2% on the Senior Citizen Savings Scheme​​, 7.4% on the Monthly Income Account​​, 7.1% on Public Provident Fund Scheme​​, 7.5% on Kisan Vikas Patra​​, 7.5% on Mahila Samman Savings Certificate​​, and 8% on Sukanya Samriddhi Account Scheme​​.

Lastly, the new entrant in the umbrella of small savings schemes, the Mahila Samman Savings Certificate​​ is offering a 7.5% rate.

These rates are available till September 30, 2023.

Generally, the ministry revises the interest rates of small saving schemes on a quarterly basis. Hence, the rates for Q3 will change be revised soon.