Rules for Premature Closure after Extension in POSB

 

Rules for Premature Closure after Extension in POSB

 

1. Five Years Lock-in Period Rule:

• Premature closure is allowed only after the PPF account has completed 5 years from the date of opening (or extension).

 

2. Extension Period Consideration:

• If you have extended your PPF account (in blocks of 5 years), the account will still be subject to the same 5-year lock-in from the start of the new extension block. Premature closure is allowed only after completing this 5-year period.

3. Valid Reasons for Premature Closure:

• Medical Emergencies: For the treatment of the account holder, spouse, dependent children, or parents in cases of life-threatening diseases. Medical documents and a doctor’s certification are required.
• Higher Education Needs: If funds are needed for higher education of the account holder or their dependent children. Proof of admission (fee receipts, admission letter, etc.) is required.
• NRI Status: If the account holder becomes an NRI (Non-Resident Indian), premature closure is allowed.

4. Penalty for Premature Closure:

• If you close the PPF account prematurely, the interest rate applied to your account for the entire tenure will be reduced by 1% from the rate applicable during that period.