If you start investing in PPF, your account will not be closed before 5 years, understand the rules of premature closure before investing.
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 get it prematurely closed under certain conditions.
PPF is a long-term scheme. Through this, you can accumulate a good amount of money in the long run. This scheme is also considered very good in terms of tax benefits. But if after starting 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 get it prematurely closed under certain conditions.
Understand in which conditions premature closure can be done.
According to the current rules of PPF, the account cannot be closed for the next 5 years of the financial year in which the account was opened. After this, the account can be closed only under certain circumstances, but a penalty is imposed on the deduction of interest.
1- If there is a medical emergency and you need money for the treatment of yourself or a family member, then you can make a partial withdrawal after 5 years or can also get premature closure done.
2- PPF can be closed prematurely after 5 years for children's higher education or partial withdrawal can be made.
3- If you are shifting abroad, you can close the PPF account and withdraw the entire amount.
4- In case of the 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, the money will be returned after deducting 1% interest.
This is the method of premature closure.
To close the PPF account prematurely, 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 contain 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 fee receipt, book bills, and documents confirming admission and in case of death, death certificate have 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.
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