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PPF Withdrawal Rules | Premature/Partial PPF Withdrawal | Withdrawal Process

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Manish Kothari
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PPF Withdrawal Rules

What is a PPF account?

Public Provident Fund (PPF) is a long-duration investment option that offers an attractive interest rate and returns on the invested amount. PPF accounts provide tax benefits in which the interest earned and the returns are not taxable under Income Tax. PPF is one of India's most popular investment options as it offers guaranteed returns along with tax benefits to the customer. Generally, PPF has a maturity period of 15 years, after which you have to withdraw the funds from your PPF account.

The interest rate on PPF account

Currently, the interest rate on PPF is 7.1% per annum (as of July 2021). This offered interest rate on the PPF account is compounded annually. A PPF account has a minimum term of 15 years, after which you may either extend for a further 5 years or withdraw the fund from your PPF account.

PPF Withdrawal

According to the rules and regulations, you can withdraw the complete PPF account balance only upon maturity, i.e., after completing a minimum tenure of 15 years. Upon maturity, the entire amount standing to an account holder's credit in his PPF account can be withdrawn freely along with the accrued interest, and the account can be closed further. However, suppose the account holder requires funds before and thus wants to withdraw before the maturity of the funds. In that case, the scheme permits partial withdrawals from year 7th, i.e., after completing 6 years of investment.

An account holder can withdraw before maturity only up to 50% of the amount in the account at the end of the 4th year. Also, withdrawals can be made only once in a financial year.

PPF Withdrawal on Maturity

As mentioned above in the article, you can withdraw the complete PPF account balance only upon maturity, i.e., after completing a minimum tenure of 15 years. For this, you have to submit a duly filled Form C either at the bank branch or the post office, where you have your PPF account. After submission and review, your account will be terminated, and the whole corpus will be credited to you.

Premature/Partial PPF Withdrawal

If the account holder requires funds, and wants to withdraw before the maturity of the funds, the scheme permits partial withdrawals with the following important rules:

Partial/premature withdrawal can be made by an account holder only after completing 6 years of investment, i.e., from the 7th year.

However, only one partial withdrawal per financial year is allowed.

PPF Partial Withdrawal Process

In case if you want to withdraw from your PPF account before maturity, follow the following easy steps:

  1. Download the PPF Withdrawal Form (Form C) from the official website or visit the nearby bank branch and collect Form C from there.
  2. Duly fill the Form C and enclose a copy of the passbook of your PPF account.
  3. Submit the form at the bank branch or the post office, where you have your PPF account.

Form C details

Form C has 3 sections, as mentioned:

Section 1. Declaration section 

In this section, you must provide your PPF account number and the amount of money you want to withdraw. You also need to mention the years that have passed since you opened the PPF account.  

Section 2. Office use section 

This section consists of various details like:

Date when the PPF account was opened

Total standing balance in the PPF account

Total withdrawal amount available in your PPF account

Money sanctioned for withdrawal

Section 3. The bank details section 

This section requires the details of the bank where the withdrawn money is to be credited. It is also mandatory to enclose a copy of the passbook of your PPF account along with this application form.

How to close a PPF account before maturity?

As per the rules and regulations, you cannot entirely withdraw your PPF account balance before completing a minimum of 15 years. However, in some cases, premature closure of the PPF account is allowed. But this facility is available only after 5 years of investment in the account. It is only permitted in the below three mentioned cases:

Life-threatening or serious diseases faced by the account holder or spouse/children

Child’s higher education

Frequently Asked Questions (FAQs)

1. What is a PPF account?

PPF is one of India's most popular investment options as it offers guaranteed returns along with tax benefits to the customer. It is a long-duration investment option that offers an attractive interest rate and returns on the invested amount.

2. What is the maturity period of the PPF account?

The minimum maturity period of a PPF account is 15 years. However, you may extend your account for a further 5 years.

3. Can I continue investing in a PPF account after 15 years?

Yes, you may continue investing in your PPF account even after maturity, up to a maximum of 5 years.

4. What is the PPF Withdrawal form?

PPF withdrawal form is available as Form C. You may download the PPF Withdrawal Form (Form C) from the official website or visit the nearby bank branch and collect Form C from there.

5. Can I close my PPF account before maturity?

Yes, you may close your PPF account before maturity only in the following cases:

Life-threatening or serious diseases faced by the account holder or spouse/children

Child’s higher education

6. Which are the top banks providing facilities to open a PPF account?

You can open a PPF account either in the post office or bank. Following are the top banks offering the same:

  • Bank of Baroda
  • HDFC Bank
  • ICICI Bank
  • Axis Bank
  • Kotak Mahindra Bank
  • State Bank of India
  • Central Bank of India

7. Can I withdraw the amount from my PPF account before maturity?

Yes. In case if you want to withdraw from your PPF account before maturity, follow the following easy steps:

  1. Download the PPF Withdrawal Form (Form C) from the official website or visit the nearby bank branch and collect Form C from there.
  2. Duly fill the Form C and enclose a copy of the passbook of your PPF account.
  3. Submit the same at the bank branch or the post office, where you have your PPF account.

 

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