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Revised Post Office Savings Schemes Rules 2023: Recent Government Changes

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  • Post published:November 14, 2023
  • Post category:General


Post Office Savings Schemes New Rules 2023

In a significant move, the government announced on November 7, 2023, a series of noteworthy changes to three popular small savings schemes – Senior Citizen’s Savings Scheme (SCSS), Public Provident Fund (PPF), and the 5-year post office time deposit. These modifications aim to streamline and enhance these schemes’ efficiency, providing investors more flexibility and benefits. Let’s delve into the key alterations made to each scheme.

Senior Citizen’s Savings Scheme (SCSS) Adjustments

  1. Extended Time for Investing Retirement Benefits:
    • Retired individuals aged between 55 and 60 now have an extended window of three months, as opposed to the previous one month, to invest their retirement benefits in the SCSS.
  2. Spousal Investment for Government Employees:
    • The new rules permit the spouse of a government employee to invest financial assistance amounts in the SCSS, broadening the scope of participation.
  3. Defined Scope of Retirement Benefits:
    • The notification clarified that retirement benefits include various payments like provident fund dues, gratuities, pension commutation values, and more. This ensures a comprehensive understanding of eligible benefits under the SCSS.
  4. Deduction on Premature Withdrawal:
    • A noteworthy change is the introduction of a one percent deduction on premature withdrawals within the first year of investment, discouraging early closures.
  5. Unlimited Extension of SCSS:
    • The account holder can now extend the SCSS account multiple times in blocks of three years each. Previously, only one extension was allowed.
  6. Interest on Extended Deposits:
    • In cases where the SCSS account is extended upon maturity, the deposit will now earn an interest rate applicable to the scheme on the date of maturity or the date of the extended maturity.
  7. Maximum Deposit Amount:
    • The notification outlines the conditions for the payment of deposits, emphasizing adherence to the maximum deposit limit after the closure of existing accounts.

Changes in Public Provident Fund (PPF) Premature Interest Calculation

The alteration in the premature interest calculation for PPF involves the substitution of the phrase “or the date of extension of the account” with “or from the date of commencement of the current block period of five years.” Consequently, interest on premature closure will be 1% less than the periodic interest credited since the beginning of the current block period of five years.

Premature Withdrawal Penalty for 5-Year Post Office Time Deposit

The government has revised the penalty for premature withdrawal from a five-year post office time deposit. If a withdrawal occurs after four years from the account opening date, the interest will be calculated at the Post Office Savings Account rate of 4%. This is a departure from the previous practice of using the interest rate applicable to three-year time deposit accounts.


These changes in the Senior Citizen’s Savings Scheme, Public Provident Fund, and 5-year post office time deposit reflect the government’s commitment to align these schemes with evolving financial landscapes. Investors should carefully consider these modifications to make informed decisions and leverage the benefits offered by these revised savings schemes.


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