Public Provident Fund (PPF) is considered a good investment for long term investment. Tax exemption is also available in this along with good interest rate. The facility to close it before the completion of maturity period is also available in certain circumstances.
New Delhi. Public Provident Fund is a better option for long term investment. In PPF, where the right interest is available, there is also a tax exemption on the money invested, the interest received on it and the amount received on completion of the maturity period. For this reason it is very popular among investors.
The maturity period of PPF is 15 years. Some people have a misconception that the money invested in it cannot be withdrawn midway. His assumption is absolutely wrong. Even before the completion of the PPF maturity period, it can be closed under certain circumstances. Let us know under which circumstances money can be withdrawn from it in advance and what is its process?
In these circumstances money can be withdrawn first
PPF account holder can withdraw money in case of illness of spouse and children. Apart from this, account holders can also withdraw full money from PPF account for the education of their children. Even if an account holder becomes a Non-Resident Indian (NRI), he can close his PPF account.
Money can be withdrawn only after 5 years
Any account holder can close the PPF account only after completion of 5 years of opening it. If it is closed before the maturity period, then 1% interest will be deducted from the date of opening of the account till the date of closure. If the account holder dies before the maturity of the PPF account, then this five-year condition does not apply to the nominee of the account holder. The nominee can withdraw money before five years. The account is closed after the death of the account holder. Nominee is not entitled to continue it.
Account closure process
If an account holder wants to withdraw money before the maturity period, then he has to fill the form and submit it to the post office or bank where you have a PPF account. Photocopy of passbook and original passbook are also required. If the PPF account has been closed due to the death of the account holder, then the interest accrues till the end of the month in which the account is closed.
PPF interest rate
The current interest rate on PPF account is 7.1 percent per annum. A minimum of Rs 500 and a maximum of Rs 1.5 lakh can be deposited in PPF in a financial year. A person can open only one PPF account in his own name.