Unclaimed PPF, NSC, SCSS accounts to be frozen twice a year if inactive for over 3 years

The Department of Posts has introduced a new regulation to freeze inactive small savings accounts twice a year. This decision, effective as of 15 July 2025, aims to secure depositors' investments by identifying and freezing accounts that have remained inactive for more than three years after maturity. Previously, this freezing activity occurred annually. This change reflects a proactive approach to safeguarding funds and ensuring that dormant accounts are managed more efficiently.

The rule

This updated protocol applies to several popular schemes, including the Public Provident Fund (PPF), Senior Citizen Savings Scheme (SCSS), National Savings Certificate (NSC), Kisan Vikas Patra (KVP), Post Office Monthly Income Scheme (MIS), Time Deposit (TD), and Recurring Deposit (RD). The department stated, "To further enhance security of hard-earned money of depositors, it has now been decided that this freezing activity will be conducted twice a year as a continuous cycle." This ensures that all involved schemes adhere to the same security standards.

Under the new system, the freezing process will be conducted biannually, starting on January 1 and July 1 each year. Accounts maturing by June 30 and December 31, and left inactive for three years thereafter, will be frozen within a 15-day window. This systematic approach aims to better protect depositors' funds from misuse or oversight, providing a reliable mechanism for account management.

Freezing of accounts

Initially, as per SB Order No. 25/2022 issued on 16 December 2022, the Post Office carried out this freezing exercise yearly. The previous rule mandated the freezing of matured but unclaimed accounts if they remained inactive for over three years, with the freeze reason code marked as "INOP: Inoperative more than 3 years." This annual process has now been improved to offer more frequent checks and balances.

The initiative is part of a broader strategy to secure dormant investments and is expected to provide better safeguarding measures for depositors. This move aligns with the department's commitment to enhancing the protection of small savings account holders who might overlook their investments post-maturity.

Interest rates for Q2 FY26

Interest rates for all small savings schemes remain unchanged for the July–September quarter of FY 2025-26. The Public Provident Fund (PPF) maintains an interest rate of 7.1%, while the Sukanya Samriddhi scheme offers the highest rate at 8.2%. The three-year term deposit interest rate remains at 7.1%, and the Post Office Savings Deposit continues at 4%. These stable rates reflect a consistent financial environment for savers.

Additionally, other schemes like the Kisan Vikas Patra offer a rate of 7.5%, maturing in 115 months, and the National Savings Certificate (NSC) stands at 7.7%. Meanwhile, the Monthly Income Scheme (MIS) provides a return of 7.4% for the current quarter. These stable rates suggest continued confidence in these savings vehicles among investors, ensuring that they remain attractive options.

The move to freeze inactive accounts twice a year is expected to bolster the security framework of the Post Office's savings schemes, ensuring that funds remain protected and managed effectively. This enhancement is a testament to the department's dedication to maintaining a secure and trustworthy savings environment.