PPF withdrawal rules: 5 account rules you need to know (2024)

FAQs

PPF withdrawal rules: 5 account rules you need to know? ›

PPF has a maturity period of 15 years after which you can choose to withdraw funds from your PPF account. Partial withdrawals are also allowed before the account matures (after the 6^th financial year from account opening) but only under certain circ*mstances.

The account tenure is 15 years and the lock-in period for the account is 15 years. You can make a deposit to a PPF account ranging from Rs.500 up to Rs.1.5 lakh per financial year. The deposit can be made in a lump sum or in instalments. There is no restriction on the number of instalments per financial year.

PPF withdrawal before maturity

One can either take out 50 per cent of the balance at the end of the fourth financial year or 50 per cent of the balance at the end of the preceding year. This depends on whichever amount is lower.

If you have a PPF (Public Provident Fund) account and it has completed its lock-in period of 15 years, you have two options: close the account or extend it. Closing the account means withdrawing the entire balance along with the accumulated interest.

Deposit your money early in the month

The PPF calculates interest on the lowest balance in the month between the 5th of each month to the end of the month. Depositing your money on or before the 5th of the month and you could benefit on the interest added on your contribution before the 5th of the month.

You can only make a withdrawal up to Rs 20 lakh in 2022. Second, you can only make one withdrawal in that year. After the extension of the account with contributions, you can only withdraw 60% of the balance accumulated at the time of extension over the fresh 5 year period.

The withdrawal amount is capped at 50% of the accumulated corpus in the fund at the end of the fourth year from the date of account opening. The following table illustrates the PPF withdrawal rules with respect to their period, grounds and amount.

And suppose, if you do not withdraw your money from your PPF account once it is matured after 15 years, the account will be extended by default. Your PPF corpus will continue to attract interest on extension as fixed by the government.

Can I withdraw my PPF amount from any branch? ›

"The banks have not fully automated the PPF withdrawal process yet. So, the investors will have to visit the concerned bank branch with whom they have opened a PPF account. Online PPF withdrawal is limited to checking the eligible withdrawal amount online through the net banking facility.

The PPF account is not transferable from one person to another. So, in case of death, the nominee cannot continue the account in his/her own name. The nominee can, however, 'open a new account' in his/her own name and deposit the amount so received.

A Public Provident Fund or a PPF account has a 15-year lifespan, after which you can either close the account or extend it by five years with or without contributions. The number of extensions is unrestricted. Therefore, you can extend the maturity of your PPF account to 20 years, 25 years, 30 years, and so forth.

As mentioned before in the article, the minimum amount that needs to be invested in the PPF account is ₹500. If an individual fails to deposit this amount at the end of the year, their account will be discontinued. When a PPF account is discontinued, no more money can be invested in the account.

You can withdraw up to 50% of the amount in your PPF Account after seven years, beginning with the end of the year you made your initial contribution. You can only make one partial withdrawal each year. To withdraw funds, you must present the PPF passbook and an application to the bank/post office.

Further, an individual will earn a higher interest by making a lump sum investment every financial year than monthly deposits in PPF account. If an individual makes a PPF investment of Rs 12,500 before the fifth of every month, the individual will get a maturity amount of Rs 39,44,599.

To maximise the interest, investors who anticipate making a lump sum PPF investment should ideally do so before April 5. Money must always be paid before the fifth of every month for monthly instalments.

After PPF, ELSS is one of the most tax friendly 80C investment options. ELSS capital gains of up to Rs 1 lakh in a financial year are tax free. Capital gains in excess of Rs 1 lakh are taxed at 10%.

Which is better PPF or FD? ›

Both FD and PPF are good options for risk-averse investors. PPF is preferred by people who are looking to save taxes along with investing for the future. Due to the government backing, the security it provides is unmatched.

Thus, the investors have to visit the bank branch with whom they have opened a PPF account. PPF withdrawal online is limited to checking the eligible amount through the net banking facility. However, the investors can download and fill in Form C and submit it at the concerned bank branch or post office.

Investment Limits A minimum of Rs.500.00 subject to a maximum of Rs.1,50,000 per annum may be deposited. Original duration is 15 years. Thereafter, on application by the subscriber, it can be extended for 1 or more blocks of 5 years each.

You are allowed to make only 12 transactions in a calendar year, and the maximum amount you can deposit in your PPF account cannot exceed 1.5 Lakh in a year.

1.50 lakhs by some way, you must remember that the excess amount will not any interest during that financial year or in any future year as you have already signed such declaration. Further, you cannot claim any income tax rebate under section 80C of the Income Tax Act for more than Rs 1.50 lakhs in a financial year.

You can withdraw funds from your account after six years of continuous contribution. However, you can only withdraw 50% of the balance in the PPF account at the end of the fourth financial year, or 50% of the PPF balance at the end of the preceding year, depending on whichever amount is lower.

As per PPF rules provisions, any kind of money received from PPF account is completely tax exempt. It can be withdrawn money amount, PPF maturity amount or PPF account closure amount. However, PPF money received before five years by premature closure or withdrawal is taxed as income.

If your PPF account has matured but you have not closed it, you will continue to earn interest as long as you keep it. However, further contributions to these accounts will not be allowed. Also, you can either continue earning from your account or close the earlier one to start a new one and invest in the same.

PPF Account Closure: In case of premature PPF account closure, a penalty is levied in the form of a 1 per cent reduction in the applied interest for the period for which the account is held. PPF Account Closure: The Public provident fund (PPF) is one of the popular government-backed savings schemes in the country.

Yes, you can check your PPF account balance through SMS service by sending an SMS- 'BAL' to 9223766666 from your registered mobile number.

Can I transfer my PPF account to another bank? ›

A PPF account can be transferred across the country, and the account can be moved across bank branches and post offices.

The rules state that employees can withdraw the entire amount in their PF account if they have been unemployed for two months or more. This means that if an employee resigns from their job, they can withdraw the entire amount in their PF account two months after their last working day.

Yes, in most cases you can take up to 25 per cent of the value of your compensation as a tax free lump sum when you decide to retire.

If the account is inoperative, you can no longer claim loans against your PPF account, which could be troublesome if you foresee requiring money soon. The Public Provident Fund (PPF) offers a set rate of return, which is currently 7.1% and is announced every quarter.

You can also partially withdraw funds after the sixth financial year of account opening. However, withdrawal is permissible only if you can meet certain conditions. PPF withdrawal can be done due to events like marriage or on medical grounds etc.

According to PPF withdrawal rules, you can withdraw up to 50% of the accumulated amount at the end of seven years. To make a withdrawal, you have to submit an application along with the passbook to the respective bank or post office.

According to the PPF rules, an individual can have only one PPF account in their name.

Along with the option of depositing the amount as a lump sum, PPF also allows an individual to deposit the investment amount in installments every month. The amount deposited every month should be multiple of 50 and should not exceed ₹1.5 Lakh.

You are allowed to make only 12 transactions in a calendar year, and the maximum amount you can deposit in your PPF account cannot exceed 1.5 Lakh in a year.

On maturity, you can withdraw the entire corpus. For this, you will have to submit a duly filled Form C at the bank branch or post office where you have your PPF account. The PPF will be terminated thereafter and the corpus will be credited to your bank account. Some banks have also replaced Form C with Form 2.

Can we deposit different amount every month in PPF? ›

Along with the option of depositing the amount as a lump sum, PPF also allows an individual to deposit the investment amount in installments every month. The amount deposited every month should be multiple of 50 and should not exceed ₹1.5 Lakh.

A person is allowed to make a maximum of 12 deposits per financial year in the PPF account. Also, such deposits cannot be more than 2 in any particular month.

You cannot deposit more than Rs. 1.5 lakhs in the PPF Account in any given financial year. The deposit frequency, however, is not limited. Earlier, the PPF account max deposit was twelve times in one financial year.

It is always advisable to invest in the PPF at the beginning of the year. This way you will be earning interest on the deposits for the entire year. Therefore, investors who intend to make a lump sum investment in PPF must preferably do it before April 5th to make the most of the interest.

PPF has lock-in of 15 years

So, if you open a PPF account in April 2023, it will mature in March 2038. After your PPF account matures, you can withdraw the entire corpus or leave the amount by extending the term for as long as you feel feasible, but that can be extended in blocks of 5 years.

PPF Partial withdrawal rule

Partial withdrawal is allowed under the Public Provident Fund scheme. You can withdraw up to 50% of the amount in your PPF Account after seven years, beginning with the end of the year you made your initial contribution. You can only make one partial withdrawal each year.

Can NRIs have a PPF Account? Yes, as an NRI, you can have a PPF Account. However, the account must have been opened when you were still a Resident Indian, i.e., prior to your becoming a Non-Resident Indian.

As mentioned before in the article, the minimum amount that needs to be invested in the PPF account is ₹500. If an individual fails to deposit this amount at the end of the year, their account will be discontinued. When a PPF account is discontinued, no more money can be invested in the account.

As per PPF rules provisions, any kind of money received from PPF account is completely tax exempt. It can be withdrawn money amount, PPF maturity amount or PPF account closure amount.

Is PPF still a good investment option? ›

As you grow older, your risk appetite tends to reduce as well. PPF is an ideal low-risk option to include in your portfolio, but it should not be the only one. For long-term, risk-free investments, the Public Provident Fund (PPF) remains one of the most preferred instruments among investors.

Investment Limits A minimum of Rs.500.00 subject to a maximum of Rs.1,50,000 per annum may be deposited. Original duration is 15 years. Thereafter, on application by the subscriber, it can be extended for 1 or more blocks of 5 years each. The rate of interest is determined by Central Govt.