PF Account Close: You started investing in this scheme 2 years ago, but now you do not want to continue this scheme and want to close the account after withdrawing all the money. Is it possible to close the PPF account in between? Let’s know.
PPF Scheme: A Safe Investment Option
Public Provident Fund (PPF) is one such government scheme that gives you the opportunity to earn big returns without any risk. This scheme has a lock-in period of 15 years and during this time this scheme gives an interest rate of 7.1%. This scheme comes under EEE (Exempt-Exempt-Exempt) category, which gives three times the benefit of tax savings.
But if you started investing only 2 years ago and now you want to close this scheme, is it possible? Let’s know about its rules.
Partial Withdrawal Option
Under normal conditions, any PPF account can be closed only after completion of 15 years. After that you can withdraw the entire money, including interest. If you need money before 15 years, you can do partial withdrawal.
• Partial withdrawal facility is available after 6th financial year.
• You can withdraw up to 50% from your account.
• Before 6 years you only get loan facility.
Loan facility is available one year after opening the account and till the end of 5th financial year. You can take a loan up to 25% of your total deposit.
Closing PPF Account in Special Conditions
You can close your PPF account prematurely after 5 years in certain special situations. But remember, on premature closure, 1% interest is deducted from the date of opening the account. These are the situations:
1. Medical Emergency: If you need money for treatment of yourself, wife or children, then you can close the account after 5 years and withdraw all the money.
2. Higher Education: The account can be closed prematurely for higher education of yourself or your dependent children.
3. Foreign Relocation: If you are permanently shifting abroad, then you can withdraw all the money and close the account.
4. Death of Account Holder: If the account holder dies, the account is closed before maturity. In this case the nominee or successor cannot continue the account. Interest is paid up to one month before the account is closed.
Process to close PPF account
If you want to close your PPF account prematurely, you will have to submit a written application to your bank’s home branch. You will have to mention the reason in the application. You will also have to attach some documents:
• Copy of PPF passbook.
• Medical emergency: Certificate issued by medical authority.
• Higher education: Admission confirmation documents, fee receipt, or book bills.
• Death case: Death certificate.
After the documents are verified, the application is accepted and the account is closed. But remember, you will get money only after the penalty amount is deducted.
Conclusion
It is important to follow certain rules and conditions to close the PPF account prematurely. So, get complete information before closing the account and keep your financial goals in mind.
