Ask Welcome MONEY | Father can close NRI son’s PPF account maturing in India

Q. I am a senior citizen. My son is a non-resident Indian (NRI) and his Public Provident FUND (PPF) account has matured. My son has no permanent account number (PAN) card. How do I close his PPF account?

Expert Comment: A PPF account that has completed its fixed tenor of 15 years can be redeemed.

Your son can withdraw it personally. He needs to carry his identity proof along with the maturity form. In case he is not in India, you need to carry a power of attorney on his behalf along with yours and your son’s identity proof with the maturity form.

Subsequently, a cheque will be issued in your son’s favour. It needs to be deposited in his domestic bank account.

Q. I am 38 years old and have two daughters. I invest about Rs 1 lakh annually for each in PPF and insurance policies. I have four unit-linked insurance plans (Ulips). I also invest through systematic investment plans (SIPs) in HDFC Top 200 (Rs 3,000), Sundaram Select Mid-Cap (Rs 3,000), SBI Gold Fund (Rs 2,000) and Birla Sun Life Dividend Yield Plus (Rs 3,000). I have also INVESTED lump sums in Reliance Diversified Power Sector Fund-Retail, Kotak Indo World Infrastructure Fund, ICICI Prudential Discovery Fund Growth and Reliance Small Cap. These amount to about Rs 50,000 per year. Will I be able to meet my goals of daughters’ education, their marriage and my retirement?

Expert Comment: Your exposure in insurance, actually Ulips, is way too high. This is not helping your aim of long-term saving. It’s best to see insurance and INVESTMENTS separately. The purpose of insurance is to give you a life cover; in case of any eventuality the sum assured provides financial stability to your family. Investments should be done for the long term to create enough assets to provide for your daughters’ education, marriage and your retirement. Hence, for insurance, look at pure insurance products or term plans.

Going forward, evaluate your existing insurance plans and if you have made the payments for the first three years or five years, depending on when you purchased the same, check the plans’ performance, their costs, surrender charges and based on the same, you can consider redeeming the same. But make sure you have adequate life cover before redeeming. Also, ensure you have a health cover for yourself and your family.

Your mutual FUND monthly INVESTMENTS are in order. You may consider increasing the same once you have stopped paying insurance premiums.

However, your lump sum INVESTMENTS in funds need pruning. Except for ICICI Prudential Discovery, all other funds are underperformers and you can redeem them.

You can consider adding one diversified fund. In this category, Fidelity Equity, Birla Frontline Equity and HDFC Equity are good options.