PPF account ALERT! Saving money? Know who can withdraw amount after demise of the holder - Check details

Public Provident Fund (PPF) is considered to be a great saving instrument and is also one of the most popular schemes among people. The maturity period of PPF is of 15 years.

If you have also invested in PPF then here are few things you need to know.

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When can PPF account be closed?

PPF account holder can withdraw money before maturity in case of treatment of life threatening disease of the account holder, his spouse or dependent children or parents, on production of supporting documents and medical reports confirming such disease from treating medical authority.

At the same time, account can also be closed for higher education of the account holder, or dependent children on production of documents and fee bills in confirmation of admission in a recognised institute of higher education in India or abroad.

On change in residency status of the account holder also the PPF account can be closed. The account holder will have to provide a copy of Passport and visa or Income-tax return provided that an account under this scheme shall not be closed before the expiry of five years from the end of the year in which the account was opened.

Provided further that on such premature closure, interest in the account shall be allowed at a rate which shall be lower by one percent than the rate at which interest has been credited in the account from time to time since the date of opening of the account, or the date of extension of the account, as the case may be.

How can you close the PPF account if the account holder dies?

If the account holder dies before the maturity of the PPF account, then the nominee can withdraw the money. In such a situation, the condition of completing 5 years of the account also gets rejected.

In other words, after the death of the account holder the PPF account is closed. The money is given to the nominee or to the legal heir. But, the same account is not allowed to be carried forward.

It can be noted that the balance in the account of the deceased account holder shall earn interest till the end of the month preceeding the month in which the eligible balance is paid to the nominee or the legal heir, as the case may be.

Who can open PPF account?

Any Indian citizen can open PPF account. The account can also be opened in the name of a minor. The account can be opened with a minimum initial deposit of Rs 500 and thereafter deposit of any sum in multiples of fifty rupees can be made.