If you are looking for a safe investment, the Public Provident Fund (PPF) is considered a reliable choice. It is a government-backed scheme that allows people to make long-term deposits and earn fixed interest.
One of the biggest benefits of this scheme is its tax advantage. The amount you deposit, the interest you earn, and the final maturity amount are all tax-free.
Although the money remains locked in the account for 15 years, withdrawals are allowed under certain conditions.
Currently, the government offers 7.1% annual interest on PPF accounts.
Ways to Withdraw Money from PPF
There are three main ways through which you can withdraw money from your PPF account.
1. Partial Withdrawal
If your PPF account has completed 5 years, you can withdraw up to 50% of the deposited amount without paying any penalty.
2. Premature Closure
In special situations such as medical emergencies or other urgent needs, you may be allowed to close the account and withdraw the full amount after five years. However, in this case, the interest earned is reduced by 1%.
3. Withdrawal After Maturity
A PPF account matures after 15 years. Once it matures, you can withdraw the entire amount in your account without any penalty.
If you decide to extend the account for another 5 years after maturity, you can withdraw up to 60% of the total deposited amount during this extended period. However, withdrawals can be made only once per year.
Withdrawal Process Before the Lock-in Period
If you need to withdraw money before the lock-in period ends, you must follow a specific process.
First, download Form C. This form is available at your bank branch or on the bank’s website. Fill in the required details, including the amount you want to withdraw and the age of your PPF account.
After filling out the form, attach a copy of your PPF passbook. Submit the completed form and documents to the bank branch.
Once the bank approves your request, the withdrawal amount will be transferred to your registered bank account.
