Finance Minister Nirmala Sitharaman announced the removal of charges for updating nominee details in Public Provident Fund (PPF) accounts.
She shared this update on Twitter, stating that financial institutions were previously charging fees for modifying nominee details, but this will no longer be allowed.
A Gazette Notification (2/4/25) will amend the Government Savings Promotion General Rules 2018, ensuring that updating nominee details in PPF accounts is now free of cost.
Additionally, the ₹50 fee for canceling or changing nominations in small savings schemes has also been abolished.
PPF: A Secure Long-Term Investment
PPF is a reliable long-term investment option with guaranteed returns. While many use it for tax savings, it offers more benefits beyond tax exemptions.
Currently, the PPF scheme provides a 7.1% interest rate, compounded annually. Investors can deposit between ₹500 and ₹1.5 lakh per year, with the account maturing after 15 years.
According to the RBI’s December 2024 bulletin, Indian citizens had over ₹10 lakh crore locked in PPF accounts as of March 2024—an increase of 39% from June 2021.
For those in the highest tax bracket, the effective yield on PPF investments is significantly higher than 7.1%.
Key Changes Under the Banking Amendment Bill 2025
Sitharaman also highlighted major updates in the recently passed Banking Amendment Bill 2025. Now, up to four nominees can be assigned to a depositor’s funds, safe custody items, and safety locker contents.
Another key amendment redefines the term “substantial tax” in the banking sector. The existing limit of ₹5 lakh, which was set nearly six decades ago, has now been increased to ₹2 crore.
Additionally, the bill extends the tenure of directors (except the chairman and whole-time directors) in cooperative banks from 8 years to 10 years, aligning with the 97th Constitutional Amendment Act of 2011.
