Ponmagan Podhuvaippu Nidhi Scheme For Boys in Post Office TamilNadu
After a growing number of requests for a scheme similar to Sukanya Samriddhi for male children, Chennai’s Postal Department eventually launched the Ponmagan Podhuvaippu Nidhi scheme. This scheme is targeted towards the male children in the state of Tamil Nadu.
This savings scheme was formally launched on 4th of September 2015. In essence, this scheme is more like a Public Provident Fund and differs from the Sukanya Samriddhi Account scheme in two key aspects:
- It entails only male child.
- Age restriction for account opening has been removed completely.
- Under this scheme parents or guardians can open an account for a male child who is below the age of 10.
- In case the child is above the age of 10, he can open the account on his own.
- Minimum amount required for opening an account is INR 100.
- Minimum balance to be maintained in a given year is INR 500.
- Maximum amount that can be deposited in a year is INR 1.5 lakhs.
- Check or cash can be used for opening the account. However, in case of check usage, users can realize the check only on the date on which the check was deposited.
Let us take a quick look at some of the key aspects of the scheme:
Who is allowed to open Ponmagan Podhuvaippu Nidhi Account?
Basic requirements for the Ponmagan Podhuvaippu Nidhi scheme
Basic restriction for the Ponmagan Podhuvaippu Nidhi Scheme
There are some important restrictions that the users need to keep in mind before opening the account. Any request that violates the restrictions during account opening or after the account has been opened will not be entertained. Here is the list of restrictions:
- The scheme has no provisions for joint account opening. This means that the account will be in the name of a single person (in this case, a male child).
- The account should be operated for a minimum of 15 years. Account cannot be close before that.
- Loan against the account cannot be requested before 3 years.
- No withdrawals are allowed from the account until it has aged for 6 complete years.
Some basic features of the Ponmagan Podhuvaippu Nidhi scheme
There are some interesting features attached with this scheme which are briefly pointed out below:
- All interest earnings under this account will be exempted from deductions made by Income Tax Department.
- Deposits made under this scheme are also free of deductions from Income Tax Department under 80C.
- 7th year onwards, users are allowed to make withdrawals every year.
- Though the maturity period is defined as 15 years, users can extend the period by 5 years by a simple application within 1 year from the date of maturity. Users can actually continue to extend the maturity in groups of 5 years as long as they want.
- The account and the maturity amount will remain active as long at the users want them to stay active once the maturity period is over. No further deposits are required for keeping the account active.
- A nominee can be selected either during opening the account or after the account has been opened.
- The account can be easily transferred from one post office to another in case the account holder moves and settles at a different location that falls under a different post office’s jurisdiction.
- Deposits can be made up to 12 times in any given year. However, the maximum allowed deposit limit cannot be violated.
- Similarly, users can deposit 1.5 lakh rupees at once in a given year and then no other deposit for the rest of the year.
- The subscriber of this scheme is allowed to open a second account but in the name of a minor. The second account will also be subject to same set of restrictions as mentioned. However, the major restriction will be that the total balance in the two accounts taken together cannot exceed the limit of 1.5 lakh rupees.
- Users can avail loan facility against the account from 4th year onwards.
What interest rate is offered under Ponmagan Podhuvaippu Nidhi?
The scheme is offering an interest rate of 8.70% every year. The interest rate will be compounded rate in nature and not simple interest rate. This means that the interest earnings will grow at a faster rate.
A few important things to note
- We have used the word ‘every year’ or ‘per year’ or ‘each year’. Here ‘year’ refers to fiscal year which starts in April and ends in March of the next year. This is different from the calendar year.
- Also, not all post offices can be approached for opening the Ponmagan Podhuvaippu Nidhi scheme. A post office should at least be double handed to offer the scheme.
Now the big question: Was it really logical to introduce Ponmagan Podhuvaippu Nidhi scheme?
The simple answer to this question is NO! The concept of Sukanya Samriddhi Account