Can We Close PPF Account?

Yes, you can close a PPF account before maturity under certain crucial situations, such as a life-threatening illness, higher education needs, or a change in residency status. But do remember that pre-closure is allowed only after 5 years of contributions, and a 1% interest reduction is applied as a penalty. You can read more details on can we close PPF account here.

How Can We Close PPF Account?

There are four steps you need to follow to close your PPF account and they are:

Check Your Eligibility 

You can close the PPF account only after completing 15 years of the account tenure. However, you can also close it after 5 years under certain crucial conditions, such as medical emergencies for the account holder or their family, higher education needs, or a change in residency status (if you become an NRI).

Premature Closure Penalty

If you opt for premature closure, you will have to pay 1% of the interest earned as a penalty. It will be deducted for the entire duration. For example, if the PPF earned 10% interest, you will receive only 9% for the entire period after premature closure.

Procedure to Close a PPF Account

To close the PPF account, you will have to visit the bank or post office and get Form C, fill it with the necessary details, like your name, PPF account number, the reason for closing, etc. Attach required documents such as medical certificates, proof of education, or change of residency documents, if applicable.

Once the form is submitted, the bank or post office will process the request, and the account balance will be transferred to your savings account or provided via a demand draft, completing the closure process. So this is when and how a PPF account can be closed. 

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Hi Friend,

Let me assist you with your query about how can we close PPF account? I have closed my PPF account permanently. Hence, I would like to share a few insights on the same. The Public Provident Fund, or PPF, is a government-backed, high-yielding modest savings plan designed to help investors build long-term wealth after retirement. 

The PPF was established in 1968 by the Ministry of Finance and currently offers a 7.1 percent interest rate. This government-backed scheme is a type of small savings insurance that guarantees guaranteed returns at maturity, which is why it is so popular with investors.

In terms of how much investment the account holder wants to make, the Public Provident Fund is a flexible system. Individuals can deposit as little as Rs 500 per year and as much as Rs 1,50,000 per year in their accounts.

Investors in PPFs are also entitled to interest on interest, which means they can earn even more money. It is a risk-free investment because the fund is backed by the Indian government and does not fluctuate with stock exchange prices.

To make it easier to withdraw all of your PPF money, and for the closure of PPF account by submitting Form C to the post office or bank at the conclusion of the 15th year. If a person does not wish to close his or her account, he or she can keep it open without contributing. The interest will continue to accrue on the balance until the account is closed in this situation. Once per financial year, the account user can withdraw any amount of money.

If the account holder wants to continue contributing to the account, he or she can ask for a five-year extension. This can be repeated as many times as desired.

A PPF account holder can only withdraw money when the account has been open for five years. If a person opens an account in February 2020, for example, he or she will be eligible to withdraw funds in the fiscal year 2025-26. The entire sum, however, cannot be taken from the PPF account.

Either 50% of the amount at the end of the fourth financial year or 50% of the balance at the end of the previous year can be taken out. Whichever amount is smaller determines this.

Under certain circumstances, a PPF account holder can choose to end his or her account early. When the account has been open for at least five years, this can be done. If the account holder, his or her parents, spouse, or dependent children are diagnosed with a terminal illness, the PPF account might be terminated. 

Another reason is if the account user wants to use the funds to further his or her education. In all cases, however, required paperwork must be provided to shut the account prematurely.

The account holder can end the account early if his or her residency status has changed.

To attest to a change in this ground, you must provide copies of your passport, visa, or tax return.

In any of these instances, if the account holder closes his or her PPF account early, he or she will get a 1% lower rate of interest than the current rates.

I conclude my answer. I hope this answer would help you with your query on can we close PPF account.

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