Post office accounts will generate zero interest from October 1

From 1 October 2024, there will be significant changes to Post Office small savings accounts under the National Small Savings (NSS) schemes. If you currently hold one of these accounts, it is important to understand how these updates could affect your savings and be informed of the critical changes.

For NSS-87 accounts

Accounts opened before April 2, 1990:

First account: interest will continue to accrue at the current interest rate.

Second account: Interest will be charged at the prevailing Post Office Savings Account (POSA) rate plus an additional 200 basis points (2 per cent) on the remaining balance.

Conditions:

The combined deposits in both accounts cannot exceed the annual deposit limits. Any deposits in excess of these limits will be returned without interest.

Important Note: This agreement is a one-time special provision, valid until September 30, 2024. After this date, both accounts will earn zero interest starting October 1, 2024.

Accounts opened after April 2, 1990:

First account: Interest will be charged at the current interest rate.

Second Account: Interest will be charged at the prevailing Post Office Savings Account (POSA) interest rate on the unpaid balance.

Conditions:

The combined deposits in both accounts cannot exceed the annual deposit limits. Any excess deposits will be returned without interest.

Important Note: This agreement is also a one-time special provision, valid until September 30, 2024. After this date, both accounts will earn zero interest starting October 1, 2024.

More than two NSS-87 accounts

If you have more than two NSS-87 accounts, the same rules apply for both accounts:

Additional accounts: For the third account and each subsequent account, no interest will be charged and only the capital amount will be returned to the investor.

What does this mean for investors?

If you have irregular NSS accounts, these changes could affect your earnings. The new rules emphasise the need to regularise accounts before 1 October 2024 to avoid losing interest income.

Investors should use this opportunity to re-evaluate their savings strategies and consider alternative investment options to ensure continued savings growth.

Also Read: FinMin Notifies Direct Tax Vivad Se Vishwas Scheme 2024, New Filing Window Opens on October 1