Public Provident Fund or PPF is one investment plan that many employees use to invest in. Moreover Government of India supports this PPF fund so that people get many benefits from such a provident fund. But if you are looking to close this account before maturity then it will be better for you to keep reading this article as we provided complete list of rules for PPF account closing before maturity.
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Use of Public Provident Fund
There are many uses of Public Provident Fund and some of these are getting loans or even extension of accounts. You may also check option for early withdrawal if necessary.
What is maturity duration of Public Provident Fund?
As of now duration of PPF is 15 years but you can also extend this time to five more years; however you take this step within 1 year of maturity. On other hand you are allowed to extend PPF maturity for more five years.
Apart from this there is one more facility according to which you may close your public PF account before maturity. For this you must follow some rules. To help you here you check below list of rules on PPF premature withdrawal option.
Rules for PPF withdrawal before deadline
- You can close your PPF or public provident fund account only after 5 financial years complete
- But this rule applies only to some situations
- You can close this account and use this money to treat serious diseases such as life threatening disease
- In addition you use this investment amount only when treating PPF account holder, dependent parents, children or spouse
- Finally and most important thing you must do is that you submit supporting documents that medical authorities provide if you wish to get this amount
Therefore Government of India along with concerned authorities are trying out different ways to help provident fund account holders. You remember that there can be penalty because you are closing PPF account before the time limit.
Before you understand about deduction of amount you can know about other situations where you can withdraw and close your Public Provident Fund account.
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Also know how to calculate EPF balance in simple ways.
Reasons for closing PPF account
- If you wish to close your PPF account then you use this amount for higher education
- This condition is only possible when five financial years complete
- You use this money for higher education of yourself that is account holder
- Or you may even use this amount to fund higher education of minor account holder
- All this is possible when you give authorities required documents
- You also should give fee payment receipts or bills to authorities
- These fee bills must be about admission in recognised institute in India or abroad
Closure of PPF account penalty
There is penalty on premature closure of account of your public provident fund and it is 1 % less interest from the time you opened your account till the time you close your account before maturity.
Thus you follow all these rules whenever you are closing your account of Public Provident Fund. You can also check what will be returns on EPF deposits for EPFO subscribers because Government of India changed this rule and made some percentage of returns on Employees Provident Fund Organisation deposits done by EPFO members.