PPF Account Premature Closure: Public Provident Fund (PPF) is considered to be a better investment option for long term. The reason for the popularity of PPF is not only the good interest rate, but also one of the reasons is that the money invested in PPF, the interest earned on it and the amount received on completion of the maturity period are exempt from tax on all three. The maturity period of PPF is 15 years but under certain circumstances PPF can be closed before maturity. Let us know about it in detail…
These are the special circumstances
In case of life-threatening illness of the PPF account holder, spouse or dependent children, the entire amount of PPF can be withdrawn. Apart from this, PPF account can also be closed before maturity in case of higher education of the account holder or dependent children, in case of change of residence status of the account holder (ie became NRI). PPF account can be closed after completion of 5 years of opening. On doing so 1% interest will be deducted from the date of account opening/extension date to the date of closure of the account.
If the account holder dies
In the event of the death of the PPF account holder before the maturity of the account, the nominee can withdraw the entire amount of the PPF account, even if the PPF account has not been opened for 5 years. After the death of the account holder, the Public Provident Fund account will be closed and the nominee/legal heir will not be allowed to continue the PPF account any further.
Form has to be submitted
To close the PPF account in the given circumstances, a certain form has to be filled and submitted to the post office or bank where you have your PPF account. Also carry the photocopy of the passbook and the original passbook along with you. If the PPF account has been closed due to the death of the account holder, then the interest on it will be available till the end of the month in which the account is closed.
Current interest rate and minimum investment
Any Indian can open a PPF account. It can also be opened in the name of a minor. PPF is a fixed interest rate scheme but the rate changes every quarter. The current interest rate is 7.1 per cent per annum. A minimum of Rs 500 and a maximum of Rs 1.5 lakh can be deposited in PPF in a financial year. PPF account can be opened in post offices and banks.
