To safeguard investor funds, India Post has introduced stricter rules for Small Savings Scheme (SSS) accounts. If your account becomes inactive or unclaimed after maturity, the post office may freeze it.
These new guidelines are particularly relevant for popular schemes like Public Provident Fund (PPF), Senior Citizens Savings Scheme (SCSS), National Savings Certificates (NSC), Kisan Vikas Patra (KVP), Post Office Monthly Income Scheme (MIS), Time Deposits (TD), and Recurring Deposits (RD).
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Act swiftly after maturity to avoid account freeze
Account holders are now advised to act promptly after maturity to avoid account freezes. As per the new circular issued on July 15, matured accounts under any of these small savings schemes must be closed or formally extended within three years of their maturity date.
Failure to do so will result in the account being marked inactive and eventually frozen. The government's intent behind this move is to protect public savings and prevent misuse of idle funds lying in inactive accounts.
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Postal department to conduct bi-annual review
Many unknowingly leave matured accounts untouched for years, putting their investment's safety at risk. Under the updated policy, the postal department will conduct a bi-annual review to identify matured but inactive accounts.
This freezing process will now occur twice a year – starting January 1 and July 1 – and must be completed within 15 days of the commencement date. Accounts that have completed three years after maturity by June 30 will be reviewed and frozen starting July 1.
Either close it or apply for an official extension
Meanwhile, accounts that matured three years prior to December 31 will be reviewed from January 1. To avoid your account being frozen, it's crucial to either close it or apply for an official extension after the three-year maturity period.
If the extension request isn't made timely, the account will be deemed inactive, and no further transactions or withdrawals will be permitted without special approval. This is a significant development.
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New Post Office Rule 2025
Especially for senior citizens and long-term investors who rely on post office schemes for steady income or retirement benefits. This announcement comes as the government maintains current interest rates for all small savings schemes for the July-September 2025 quarter.
While this is good news for investors, the onus is now on account holders to ensure they comply with the new rules to safeguard their savings. Regularly check your post office accounts and take timely action to avoid issues.
