As per the rules, after starting investing in Public Provident Fund, you have to run this scheme for a minimum of 5 years, only after that you can get it closed prematurely under certain conditions.
PPF Investment: PPF is a long term scheme. Through this, you can save a lot of money in the long run. This scheme is also considered very good in terms of tax benefits. But if after you start investing in PPF, you come to know about a scheme that gives better returns than this and you want to close your PPF account and start investing in another scheme, then how will you do this?
Everyone knows that the PPF scheme matures in 15 years, but most people are not aware of its premature closure. According to the rules, after starting investing in the Public Provident Fund, you have to run this scheme for a minimum of 5 years, only after that you can close it prematurely under certain conditions.
Understand in which situations premature closure can be done
According to the current rules of PPF, the account cannot be closed for the next 5 years from the financial year in which the account was opened. After this, the account can be closed only under certain circumstances, but a penalty is levied on deduction of interest.
1- If there is a medical emergency and you need money for your or your family member’s treatment, you can make a partial withdrawal after 5 years or you can also get it closed prematurely.
2- For children’s higher education, PPF can be closed prematurely after 5 years or partial withdrawal can be made.
3- If you are shifting abroad, you can also close the PPF account and withdraw the entire amount.
4- In case of death of the account holder, the account can be closed before maturity. In this case, the 5-year rule does not apply.
5- If you withdraw before the account matures, you will get the money back after deducting 1% interest.
This is the method of pre-mature closure
To close the PPF account pre-maturely, 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 also have to attach some documents with the application. It should have a copy of the PPF passbook.
Also, if you are closing the account for treatment of illness, then the documents given by the medical authority, if you are closing the account for higher education, then the fee receipt, book bills and documents confirming admission and in case of death, the death certificate has to be attached. After verification of the documents, the application to close the account is accepted. After this, your account is closed but the penalty amount is deducted.
