How To Close PPF Account – Account holders can close their PPF accounts after the maturity period. A PPF account can also be permanently closed at a specified time only as per certain terms and conditions.
A premature closure request can be placed by submitting PPF closure form duly signed by the account holder with valid reason for PPF amount withdrawal. Here’s everything you need to know about PPF account closure in two scenarios:-
- PPF account closure after maturity
- Premature closure of PPF Account
PPF Account Closure After Maturity
The maturity period of a PPF Account is 15 years. You are free to withdraw the whole fund after this duration. Your PPF account will be closed once the complete amount has been withdrawn. This guideline is also applicable to HDFC, SBI, ICICI, and other banks.
The 15-year duration is calculated from last day of the financial year in which the account was opened. For example, if you started a PPF account in October 2019, then the 15 years will be counted from March 31, 2020. So, it will mature on March 31, 2035. Note that, if you started your PPF account before April 5, 2020. Then, the term will be calculated from April 1, 2020.
Once the PPF account matures, you would have 2 options.
- Full balance withdrawal and account closure – Once your account matures, you can visit the Bank and apply for full PPF balance withdrawal.
- Partial or No Withdrawal and extension of account– You have the choice of extending your PPF account after the maturity. The extension period is available in the blocks of 5 years.
PPF Account Closure For NRI
A NRI is not eligible to open a PPF account. If a person opened a PPF account before becoming an NRI, then the following terms are applicable:
- An NRI can keep his account open till it matures.
- Non-resident Indians are not eligible for an extension of PPF account.
- Once a person becomes an NRI, he or she is no longer able to contribute to the account.
- The PNB PPF account will continue to receive PNB PPF interest until it matures.
- If an NRI does not withdraw the balance after maturity, the fund will earn interest entitled of a savings account.
PPF Account Closure Before Maturity
The government has provided three grounds for closing a PPF account before its maturity period (subject to submission of valid documents).
- Medical emergency for self, spouse, dependent children or parents.
- Higher education for self or children.
- Death of account holder
Points To Remember :-
- Premature closure of a PPF account is applicable if and only if the account is at least 5 years old. Before that, you are only eligible to take out a PPF loan from the second to the fifth year.
- For a premature withdrawal, the interest rate of PPF Account will be reduced to 1% for each invested year.
Also read