Public Provident Fund (PPF) is a government scheme in which any Indian citizen can contribute. PPF account can be opened in any bank or post office. By investing in it, you can take advantage of provident fund even without a job and can get strong returns through it in future.
PPF account is opened for 15 years. In this you get the benefit of compounding. At present, interest is being received on PPF at the rate of 7.1 percent. But suppose that due to some circumstances you are not able to continue the PPF account and want to close it before maturity, then what are the terms and conditions for the same. Know about it here.
Can be closed after 5 years
In some special circumstances, you are allowed to close the PPF account prematurely. But for this also your account should be at least 5 years old. You can only take PPF loan before completion of 5 years, cannot get it closed. Also, you must have one of the prescribed reasons to close the premature account. Know the conditions-
- If there is a medical emergency and you need money for the treatment of yourself or a family member.
- If you need money for your own higher education or higher education of your child.
- The account can be closed before maturity even in case of death of the account holder. In this situation the 5 year rule does not apply.
- If you withdraw before the account matures, then the money will be returned by deducting 1% interest.
Written application required
For premature closure of PPF account, you have to submit a written application to the home branch of the bank account. In this application, you have to tell the reason why you are closing the account. Meanwhile, you have to attach some documents along with the application. It should have a copy of PPF passbook.
Also, if you are closing the account for the treatment of illness, then the documents given by the medical authority, if you are closing the account for higher education, then the receipt of fees, bills of books and documents confirming admission and in case of death I have to attach death certificate. After the verification of the documents, the application for closure of the account is accepted. After this your account is closed but the penalty amount is deducted.
