Maturity and Premature Closure of KVP
a KVP Account Holder Early closure of the account can be done at any time before maturity by submitting Form-3 application to the bank or post office. According to the India Post website, premature closure is permitted only on the following conditions:
- In case of death of any or all the account holders in a single account or joint account
- On confiscation by the pledgee being a gazetted officer.
- When the court ordered
- After 2 years 6 months from the date of submission.
KVP Nomination
The sole holder or joint holder of a certificate may nominate any person who, in the event of the death of the sole holder or both the joint holders, shall be entitled for the certificate and for payment of the amount due thereon by filling up the required amount . Information in Form C while purchasing the certificate.
If such nomination is not made at the time of purchase of the certificate, it can be done at any time after the purchase of the certificate but before maturity by the sole holder, joint holders or surviving joint holder by submitting an application in the form. c to the post office or bank officer on which the certificate is registered.
These are the rules for enrollment according to the National Savings Institute
- No nomination shall be made in respect of a certificate applied for and held by or on behalf of a minor.
- A nomination made under this rule by the holder or holders of the certificate may be canceled or changed by submitting an application in Form D.
- Separate application for nomination or cancellation of nomination or change in enrollment in respect of certificates registered on different dates will be made.
- Nomination or cancellation of nomination or change in nomination shall be effective from the date on which it is registered with the post office, which shall be noted on the certificate.
- No fee will be charged for first time enrollment but a fee of Rs. 20/- per subsequent enrollment or cancellation will be charged by the post office or bank.
What happens after the death of KVP holder
As per India Post notification from December 2019, if a person is available or the deposit is payable to a legal heir, the depositors of one account or all the depositors in a joint account are no longer there.
If there are not more than three surviving nominees or legal heirs, they can choose to continue with the account and deposit the principal and interest on maturity in the same manner as if they had started it themselves.
The balance account holder or holders, if any, of a joint account shall be recognized as the owner or owners of the account on the death of one or more of the account holders, and they may continue to use the account.