PPF or Public Provident Fund is one of the best ways to save money today and get the principal amount along with the earned interest after maturity. It was an initiative taken by the government to encourage the saving habits of the people along with providing them with a moderate rate of interest on the deposited value.
The lock-in period of the PPF account is 15 years before which the account holder cannot withdraw the complete amount. However, partial withdrawal can still be made but only after the completion of 6 financial years. PPF account holders have the liberty of premature closure of the PPF account; however, it can only be closed after 5 financial years on medical or educational grounds.
In this blog, we will provide you with the steps to withdraw money from a PPF account and other required information.
What is PPF withdrawal after maturity?
PPF or Public Provident Fund gets matured after the span of 15 years. Once the PPF account lock-in period gets matured, the account holder gets an option to withdraw the complete amount or extend its duration in a block of 5 years at a time.
How to withdraw money from a PPF account?
The partial withdrawal of money from a PPF account takes place only after the completion of 6 financial years from the date of opening the account. However, the complete withdrawal of money from the PPF account can only be done after 15 years of the lock-in period are complete. In case of partial or complete withdrawal of money, following are the steps to be followed carefully-
- 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- Enter all the required details in the form like PPF account number, amount to be withdrawn, the total number of financial years completed since the opening of the PPF account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?
In case the individual wishes to extend the tenure of the PPF account, he/she can do the same but in a block of 5 years at a time. Also, if an individual does not withdraw the money after maturity, the tenure will extend automatically. The account then will fetch additional interest according to the applicable rate of interest.
- Withdrawal after extension
If the PPF account holder wishes to extend the tenure of the PPF account in the blog of 5 years, he/she can withdraw the amount but before the extension gets started. An individual is allowed to withdraw only one PPF withdrawal per year after the extension.
- PPF extension with an additional contribution
PPF account holders are given the choice to extend the tenure of their PPF account by continuing to add contributions to it. This will make them earn interest on the deposited amount too. This extension can be availed only if the individual has submitted Form H to extend the tenure of the PPF account within one year of the original date of the account maturity.
- 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.
Who is eligible to open a PPF account?
PPF account can be opened by –
- Indian citizens only
- An Indian citizen settled abroad can continue operating his/her PPF account
- Parents/guardians on behalf of their minor children can open a PPF account
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