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Saturday, February 20, 2016

Now, premature closure possible in PPF postal scheme

With the Public Provident Fund, recently re-launched as Ponmagan Podhuvaippu Nidhi, gaining more patronage, the postal department has relaxed a few norms for the savings scheme.

Soon, customers have the option of closing the deposit scheme after completing five years for reasons such as children’s higher education or expenditure towards medical treatment.

In the last six months alone, nearly 20,000 PPF accounts have been opened in Chennai city region. The scheme has nearly 1.21 lakh depositors so far in the region.

Earlier, the depositor could take loans and partially withdraw in the seventh year of the scheme.
Now, premature closure of the deposit is allowed. Officials of the postal department said the scheme, which does not involve any age limit, can also be opened in the name of children through their guardians. Depositors could save from Rs.500 to Rs.1.5 lakh in a year for which an interest of 8.7 per cent is provided.

However, the Tamil Nadu circle has only 1.78 lakh PPF accounts of which a major chunk has been opened in the Chennai region. Sources said the long-term savings scheme had not reached the rural and suburban areas. Though the Union government has decided to recalibrate interest rate of small saving schemes from April 1, depositors may enjoy the same interest rate for saving in PPF.
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