Do you know that now onward if you close your PPF account prematurely, you have to lose 1% interest from the starting date of ppf account opening date. Have you noticed so many changes in PPF account rules and EPF rules in 2016? This is not the end, as the new PPF account rules will again going to create some problem for small debt investors.
If you are looking for queries like can we close ppf account, can i close my ppf account prematurely, ppf discontinued account, terms and condition of ppf account closure, ppf minimum maturity period or new public provident fund rules and regulations then this is the place where I will explain about this rule.
Previous PPF Rules on Premature Closure of PPF accounts
Previously, one can close or discontinue a PPF account on couple of special scenarios only. E.g. in case of death of account holder nominee will get the option to close the account. But other than that there is no clause to close PPF account before maturity. Although it is good for investment and long term wealth creation point of view, but still the flexibility is the big question.
New PPF Account Rules 2016 – Premature Closure of PPF accounts
Now onward there are couple of ways to close PPF account prematurely as well.
- The previous rule of closure of PPF account in case of account holder’s death is still valid.
- One can close PPF account in case of life threatening diseases of account holder, spouse, dependent children or parents.
- In case you need financial support for your kids higher education, then also you can close your PPF account.
PPF account Penalty Rules 2016 on Premature Withdrawal
But the new rule has come up with a very strange penalty. You have to bear a loss of 1% interest rate from the beginning of the account opening date. E.g. if you are closing your PPF account after completion of 6 years in 2016, then your accounts interest rate will be re-calculate again considering 1% less interest rate of every year starting from 2010 onward. If you consider the compounding interest rates, then it will be more than 1% loss.
For more detail, please visit the Notification of New changes.