Post office savings schemes like PPF (Public Provident Fund) and NSC (National Savings Certificates) will now get closed prior to maturity if the holder of such accounts changes his status from ‘resident’ to ‘NRI’ (Non-Resident Indian), the government has announced. Also, “such holders will earn only post office savings account rate of 4 per cent and not the higher rate on those instruments when the status was one of resident. In the case of public provident fund, the account is deemed to be closed the day the status of the account holder changes to NRI,” said a PTI report.
As per the amendment to the Public Provident Fund Act, 1968, “… if a resident who opened an account under this scheme subsequently becomes a non-resident during the currency of the maturity period, the account shall be deemed to be closed with effect from the day he becomes a non-resident…” Interest with effect from that date will be paid at the 4 per cent rate applicable to the post office savings account up to the last day of the month preceding the one in which the account is actually closed, the Public Provident Fund (Amendment) Scheme, 2017, says.
A separate notification, issued by the government, on National Savings Certificates (NSCs) said that the certificate will be deemed to be encashed on the day the holder becomes an NRI, interest will be paid accordingly.
It may be noted that the government had last month kept unchanged interest rates on small savings schemes for the October-December quarter. “Since April last year, interest rates on all small saving schemes have been recalibrated on a quarterly basis. The government has pegged 7.8 per cent interest for both PPF and NSC schemes for October-December,” said the PTI report.