PPF: Can a Public Provident Fund account be closed prematurely?
The Public Provident Fund (PPF) in India offers a 7.1% tax-free interest rate, but accounts can be closed prematurely under specific circumstances. Investors can close their PPF account after five full financial years, but will face a 1% interest penalty, or make partial withdrawals starting from the sixth financial year.
The Public Provident Fund (PPF) is a long-term savings instrument with a 15-year lock-in period. It offers a 7.1% tax-free interest rate. Accounts can be closed prematurely after five full financial years under certain conditions, such as medical emergencies or higher education. A 1% interest penalty applies to early closures. Partial withdrawals are allowed starting from the sixth financial year, capped at 50% of the lower balance. Investors can also borrow against their PPF, with a limit of 25% of the balance and a repayment period of 36 months.
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