What are PPF withdrawal rules- All you Need To Know About it

PPF withdrawal rules

The Public Provident Fund (PPF) is an investment instrument that helps an individual save for the future. Just like a fixed deposit account, a user is required to submit an amount but on a monthly basis till maturity. Apart from that, interest is given to the users on the principal amount that can be collected during the time of maturity of the PPF account.

The entire amount deposited into the PPF account can be withdrawn after maturity whereas, partial withdrawal is also available but only after the completion of 6 years. Partial withdrawal is allowed when an individual falls under the circumstances decided by the government.

In this blog, we will understand more about the public provident fund withdrawal rules, how to withdraw the amount from the PPF account, PPF account form, PPF limitations and more!

What is a PPF Account or Public Provident Fund?

The Public Provident Fund is also known as PPF. It is a government-backed investment instrument that offers an opportunity to the individual to save a part of his/her income annually, to build the post-retirement savings or retirement corpus.

  • The amount deposited into the PPF account makes an individual eligible to receive interest on the principal amount
  • PPF offers tax-saving benefits on the deposited amount
  • It was basically introduced to encourage people who don’t fall under the Employee Provident Fund Organization (EPFO) to save and build a retirement corpus
  • A tax benefit of up to Rs 1.5 lakh under Section 80C of the Income Tax Act can be availed through the PPF scheme

Who can Open a PPF Account?

People who are eligible to open a PPF account are-

  • Only Indian citizens
  • Parents/guardians on behalf of their minor children can open a PPF account
  • An Indian citizen settled abroad can continue to operate his/her PPF account

*It is to be noted that joint accounts and multiple PPF accounts are not allowed to be opened

What are PPF Withdrawal Limits?

PPF accounts can be proven a good investment option for those people who want to save for a longer period of time. The PPF comes with a lock-in period of 15 years and the amount in it can only be withdrawn after its maturity. Though a partial withdrawal facility is also available that can only be availed after the completion of 6 years. Thus, it is important to understand a few basic things about the PPF withdrawal limits-

  • Premature withdrawal can only take place after the completion of 6 years
  • The amount to be withdrawn has a limit assigned to it
  • In case of taking a loan against the PPF account, the amount will be deducted from the withdrawal amount
  • Only one withdrawal is allowed per financial year

How to Withdraw Money from a PPF Account?

The entire amount from the PPF account can be withdrawn after completion of the maturity period and partial withdrawal is allowed after the completion of 6 years. Following are the steps to follow to partially withdraw money from the PPF account

  • Fill the Form C
  • Enter all the required details in the form like PPF account number, amount to be withdrawn, the total number of financial years completed since the opening of the account
  • Submit the form along with the PPF passbook
  • The bank will further check all the details written on the form along with the eligibility of the account holder for the amount withdrawal
  • Upon completion of the above-mentioned process, the amount will be credited to the account holder savings account

What are PPF Withdrawal Rules on Extension?

If one would want to extend the maturity of the PPF account, he/she can do it in a block of 5 years. Besides, in case, one does not pull out the complete amount from the PPF account after maturity, the tenure will get extended automatically.

  1. Withdrawal after extension

If the PPF account holder wishes to extend the tenure of the PPF account in the block of 5 years, he/she can withdraw the amount but, before the extension gets started.

  1. PPF extension with an additional contribution

PPF account holders can extend the tenure of their PPF account by continuing to add contributions to it. The extending tenure will earn them interest on the deposited amount too.

  1. Withdrawal after PPF extension with a contribution

After the PPF account extension with contribution, the account holder is given the opportunity to withdraw 60% of the balance at the time of extension over the block of 5 years. Note that only one withdrawal per year is allowed.

What are the Limitations of a PPF Account?

Listed below are the limitations of a PPF account-

  • PPF accounts have a lock-in period of 15 years, which makes it difficult for the account holder to withdraw money at the time of need. However, for medical or educational emergencies, a partial withdrawal facility is available
  • If one wants to withdraw the amount before maturity, there are certain rules & regulations that are required to be followed
  • PPF does not offer competitive interest rates
  • An individual cannot apply for a joint PPF account
  • The maximum amount an individual can contribute to the PPF account is Rs. 1.5 lakh only over a year
  • Only Indian citizens can open a PPF account, NRIs and Hindu Undivided Families cannot a PPF account
  • One cannot close a PPF account within 5 years of opening the account

List of Forms associated with PPF Scheme

Following are the forms that are required to be used when opening a PPF account or to avail its related services-

Form ATo open a PPF account
Form BTo make a deposit into the account or to make repayment of the loan
Form CTo obtain the partial withdrawal
Form DTo request a loan
Form EFor making a nominee
Form FFor making changes to the account details
Form GTo claim funds in the account either by a legal heir or nominee
Form HFor extending the tenure of the account
What is Form A for the PPF account?
Form A is used to open a PPF account.
Is it possible to withdraw the PPF amount online?
Yes, the PPF amount can be withdrawn online through internet banking.
Can I close my PPF account before maturity?
PPF accounts can be prematurely closed but only after completion of the 5 financial years since the account is opened.
Where can I find the PPF account statement?
Get the PPF account statement by using internet banking.
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