PPF: How will the settlement happen if the PPF account holder dies suddenly? Will we have to wait for the amount to mature?

Public Provident Fund (PPF) is one of the most preferred and safest ways of saving in India. It not only helps in tax-saving, but also gives good returns in the long term. But there is no guarantee of life. In such a situation, if a PPF account holder dies suddenly, what will happen to the money invested in it? Does the nominee or legal heir get the deposited money immediately, or does he have to wait till maturity? Let us know what the rules are in this case.

PPF tenure and settlement rules

A PPF account comes with a lock-in period of 15 years. Usually, the entire amount cannot be withdrawn from this scheme before maturity. But in some special circumstances, permission is given to close the account before the time. Even in the case of the death of the account holder, the nominee or legal heir does not need to wait till maturity. In such a case, the nominee can make a death claim on the account by showing their ID. During the claim, they need the death certificate of the account holder.

What will the nominee have to do?

After the death of the PPF account holder, the nominee will have to go to the post office or bank, wherever the PPF account is opened, and fill the death claim form (Form G) and attach the necessary documents like copy of death certificate, PPF passbook, identity proof of nominee (Aadhaar, PAN, Voter ID), cancelled cheque (of nominee's bank account), address proof of nominee etc. After this, he will get the amount deposited in the PPF account, and the account will be closed.

If the nominee is a minor, then…

If the nominee is a minor, then the claim will be made on behalf of his guardian. In such a case, documents like a copy of the death certificate, PPF passbook, identity and address proof of the guardian, a cancelled cheque, as well as a declaration that the funds will be used for the benefit of the minor, will be required. After submitting all the documents, the bank or post office will verify these documents. Once everything is found to be correct, the funds will be transferred to the nominee's bank account. On the other hand, if there is more than one nominee, the funds will be divided among them according to the percentage that was decided while opening the PPF account. If the percentage is not decided, then the funds will be divided equally among all the nominees.

What if there is no nominee?
If the account holder had not made any nominees, then the situation becomes a bit complicated, but there is a solution to this, too. In this case, the funds go to the legal heirs. In such a situation, the legal heirs (such as wife/husband, children, parents) will have to claim. In such a situation, the death certificate of the account holder, the PPF passbook, identity, and address proof of all the legal heirs claiming will be required. If needed, a succession certificate can also be asked for.

If the nominee does not want to close the account then…
In case of death of the account holder, the nominee or legal heir is not allowed to continue depositing in the account. In such a case, the account has to be closed. At the time of closing the account, interest on PPF will be paid for the entire month immediately preceding the month in which the account is closed.

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