PPF Withdrawal Rules – Partial and Full Withdrawal

PPF stands for Public Provident Fund scheme. It is a long-term investment avenue that lasts for 15 years. One can extend the investment period by 5 years for infinite times. Before the completion of 15 years, the money deposited in this account can’t be withdrawn. However, there are some criteria under which one can do partial PPF withdrawal from the account. In this article, we will discuss what are these PPF withdrawal rules? and how can you withdraw the money from the PPF account?

What is PPF Account?

PPF account is the central government-managed investment scheme for the long term. The account once open must remain active for a minimum of 15 years. Since this account is managed by the central government, the investment done in this account is 100% secure and returns are assured.

PPF account is very famous among Indian households as a small saving scheme. A yearly investment of ₹ 500/year is required to keep the account active. PPF account is the first choice for people wanting safe and guaranteed returns.

Investment done in the PPF account is exempted from taxes. It comes under Exempt-Exempt-Exempt (EEE) category. This means the money invested in the PPF account during the financial year is exempted from the individual’s taxable income. Not only that, the interest earned on the deposits are tax-free returns when you withdraw them at the maturity date.

The interest payable on the PPF account is decided by the central government every quarter. The latest interest rate on the PPF account is 7.1% for the period of 1st April 2021 to 30th June 2021. The deposits are 100% secure and the government is bound to give your investment amount + interest earned on the deposits under any circumstances.

PPF Withdrawal Rules

Since this investment is for a minimum of 15 years, pre-mature withdrawal is not allowed. However, there are certain criteria under which the withdrawal can be done before the completion of 15 years. Let’s check these PPF withdrawal criteria.

Partial PPF withdrawal is allowed under the below circumstances only. The investor must fulfill the below criteria for withdrawing partial balance from the PPF account.

  • The PPF account must be at least 5 years old and active. Only after the completion of the 5th financial year, partial withdrawal can be possible.
  • There is a cap on the amount one can withdraw from the PPF account as a partial withdrawal, the criteria for the same is as below. The lower amount from the below will be eligible for withdrawal.

50% of the account balance as at the end of the financial year, preceding the year of withdrawal, or

50% of the account balance as at the end of the 4th financial year, preceding the year of withdrawal

Form C must be filled in and submitted to the bank where the PPF account is running.

The partial withdrawal can be done for below scenario only.

  • If there is any medical emergency in the family.
  • If you want to send your children abroad for higher study.
  • If you have purchased a new house and want to pay as a down payment.
  • If there is a marriage of the PPF account member or his/her daughter/son’s marriage.
  • If the member’s property is damaged by any natural calamity like earthquake, flood, tsunami, etc.

How to apply for Partial PPF Withdrawal?

For partial PPF withdrawal, the member needs to fill in form C and submit it to the bank/post office where the PPF account is running. The form needs to be filled in after check the eligibility based on the above criteria. The form once submitted to the bank will take some time to check the eligibility criteria. Once the application is approved by the central government, the funds will be released to the bank account you have mentioned in the application.

The entire process takes about 10 to 15 days from the date of your application. The interest earned on the accumulated amount in the account will be on a pro-rata basis to the date of your withdrawal.

PPF Account Eligibility Criteria

Here is the criteria for opening a PPF account in India.

  • Only Indian residents can open a PPF account.
  • A resident Indian who has become NRI after opening a PPF account can continue the account till its maturity.
  • For minors, the parents or the guardian can open the PPF account.
  • Member can open only one PPF account in his/her name.
  • A joint PPF account is not allowed.

Documents Required for PPF Account

Now as we know the eligibility criteria, let’s check the documents required for opening the PPF account.

  • The account opening form, usually available at the bank or the post office wherever you want to open the account.
  • Valid ID proof like Aadhaar card, Voter ID card, Driving License, etc.
  • Valid/current address proof.
  • PAN card.
  • Passport size photo
  • Nomination form – for declaring the name of the nominee.

Where Can You Open a PPF Account?

Here is the list of the banks where you can open PPF account in India.

ICICI BankHDFC BankAxis Bank
Indian Overseas BankBank of BarodaState Bank of India
Corporation BankBank of IndiaCentral Bank of India
Canara BankIndian BankUnion Bank of India
Punjab National BankUnited Bank of IndiaIDBI Bank

Apart from the above banks, you can open the PPF account with Indian post office.

How to check the PPF Balance?

You can check your PPF balance in various ways. The most popular way of checking your PPF account balance is online mode. Where you can go to the PPF website and check your balance by entering your ID and password. Most of the banks where you can open your PPF accounts are providing an online facility for checking PPF balance. I have written a detailed article on how to check the PPF account balance? Check that article for various ways of checking PPF balance.

Rules for PPF Nomination

Nomination in PPF account is a must do thing. This will help you to withdraw the fund in case the member is No. more. Here are some of the points you should consider before applying for PPF nomination.

  • You can not declare a minor as a PPF account nominee.
  • You can nominate your parent, spouse, child, relative, friend as a nominee.
  • The nominee form must be signed by the member in presence of two witnesses.
  • You should give nominations at the time of account opening only.
  • You can, later on, change the nominee name if you wish. You need to fill in form F for that.

PPF Account – FAQs

Can I withdraw PPF balance after 5 years?

The PPF account is for 15 years, however, you can withdraw partial (50%) of the account balance after completion of the 5th financial year.

Can I withdraw money from the PPF account before maturity?

As I mentioned above, the partial withdrawal is allowed after completion of 5th financial year.

How much will I get after completion of 15 years of PPF account?

Well, that depends on your deposit transactions and the rate of interest declared by the central government from time to time.

What is the age limit for PPF account?

18 years is the minimum age for opening a PPF account in India.

Can I have 2 PPF accounts in different banks?

No., You cannot have 2 PPF account in your name. There is only 1 PPF account granted per person.

Can I have a joint PPF account with my spouse?

No, you cannot have a joint PPF account. It must be in the individual name only.

Which is the best bank for PPF account?

Well, there is no difference it makes that you open a PPF account in any bank. The interest rates and all the other standard guidelines will remain the same. There could be a customer service difference from bank to bank. As per me, you should open a PPF account with the bank where your primary bank account is.

Is investment in PPF is safe investment?

It is managed by the central government and it is 100% safe and secure. The central government is bound to give your money back under any circumstances.

What happens to PPF account after 15 years?

You have two options, either withdraw all the funds and close the PPF account. OR you can extend the PPF account tenure by 5 years.

Can I transfer my PPF account?

The PPF account can be transferred from the bank to the post office or vice versa. It can also be transferred between different branches of the same bank.

Conclusion:

The PPF account is the famous saving/investment option for Indian households. It offers attractive returns on the funds. The power of compounding works in your favor if you regularly keep depositing funds in the PPF account and never withdraw from it. But recently the central government has amended the PPF withdrawal rules and made it easy for the members to withdraw.

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