Can I close Minor’s PPF Account for Education?
Public Provident Funds not only give you opportunity to open an account for yourself but also for your dependent minor. The maximum and minimum limit of investment in case of minor too is the same as that of an adult. The only difference is that since the minor can’t claim tax benefits of the PPF account, you can claim its tax benefit for yourself.
We often come across queries from young parents who already have or are contemplating to open a PPF account for that minor, whether they can close the minor’s account, if the need be. The answer to this question is not that straight, however, yes; you can close the account of your minor kid, if there is an exigency.
At the same time, if you are closing the PPF account of the minor before maturity of the account, you would not be getting the maturity benefits at all. That means whatever money would have accumulated in your kid’s PPF account would be handed over to you after deducting the fines, if any by the respective banks or post office.
In the first place, we need to understand as to why people require closing the PPF account for a minor. If there is a financial emergency and the guardian or parents are depending on the accumulated amount of the kid’s PPF account, they should either opt for loan facility if the tenure of the account is between three to 7 years or go for partial withdrawal from seventh year.
However, there is a clause to the above suggestion. You can neither avail loan for the full accumulated amount in the PPF Account, nor will the partial withdrawal suffice if you are looking for the entire amount accumulated in the account. If there is no other option left with you, you would certainly have to get the kid’s PPF account closed.
Closing a PPF account is not that complicated. You just need to walk up to the branch where you hold the PPF account and fill necessary forms along with an application and hand it over to the bank officials. They would apprise you of the final amount that is going to be disbursed against the account. If there is a dispute for the amount of charges levied by the bank, you can always complain this to the Bank Ombudsman and get a solution out of it.