Public Provident Fund (PPF) holders can prematurely close the deposit scheme for reasons such as higher education or expenditure towards medical treatment, the finance ministry said on Monday. The ministry said such premature closure shall be allowed only after the account has completed five financial years.
Earlier you were not allowed to prematurely close your PPF account. You had to complete 15 years to close it, even if the account is left inactive.
The premature withdrawal, however, comes with a penalty—you will get 1% less interest as applicable from time to time.
A PPF subscriber shall be allowed premature closure of her account or account of a minor of whom she is the guardian on grounds that the amount is required for treatment of serious ailments or life-threatening diseases of the account holder, spouse or dependent children on production of supporting documents from competent medical authority. Similarly, you will be able to prematurely close your PPF account for higher education needs only if you produce documents and fee bills showing confirmation of admission in a recognised institution in India or abroad.