PPF Withdrawal Rules Explained: A Simple and Practical Guide

Public Provident Fund (PPF) is one of the most popular long-term savings options in India. It offers tax benefits, steady returns and a 15-year lock-in period. But what happens when you need to withdraw funds before maturity? Here is a clear and simple breakdown of the PPF withdrawal rules. 

Read on to learn about the rules, benefits, premature closure policy and more. 

Understanding PPF Withdrawal Rules

PPF allows withdrawals in two ways:

• Partial Withdrawal: Allowed after a certain number of years for emergencies or specific needs.
• Complete Withdrawal: Possible only at maturity, but there are exceptions for premature closure.

PPF Partial Withdrawal Rules

PPF partial withdrawal is permitted only after 6 financial years from the date of account opening. Here’s what you need to know:

Criteria	Details
Eligibility	Allowed from the 7th financial year
Amount Limit	Up to 50% of the balance at the end of the 4th year or preceding year, whichever is lower
Number of Withdrawals	Once per financial year
Approval Process	Submit Form C to the bank/post office

Example:

Let’s say your PPF account has the following details:

• Balance at the end of the 4th year: ₹5,00,000
• Balance at the end of the last financial year: ₹6,00,000
• You can withdraw 50% of ₹5,00,000, i.e., ₹2,50,000

Tip: If you don’t need the money urgently, let it compound for higher returns.

PPF Premature Closure 

PPF comes with a 15-year lock-in period, but in specific cases, you can close it before maturity.

When Can You Close a PPF Account Prematurely?

Reason	Condition
Serious Illness	Self/spouse/children, with medical documents
Higher Education	Admission proof from a recognised university
Change in Residency	If you become an NRI (and have valid proof)

Premature Closure Penalty:

If you opt for premature closure, the interest earned is reduced by 1% from the applicable rate.

Example: If your PPF interest rate is 7.1%, the effective rate after premature closure will be 6.1%.

Tip: Avoid premature closure unless absolutely necessary. Even a small dip in interest can affect your long-term wealth.

PPF Withdrawal Rules After Extension

At maturity (after 15 years), you have 3 options:

1. Withdraw the Full Amount: No restrictions.
2. Extend Without Contribution: The account continues to earn interest.
3. Extend With Contribution: You can continue investing for 5 more years in blocks.

Partial Withdrawal Rules During Extension

Account Status	Withdrawal Rule
Extended Without Contribution	Unlimited withdrawals allowed
Extended With Contribution	One withdrawal per year, up to 60% of the balance at extension time

Tip: Extending your PPF account helps maximise compounding benefits.

Also Read: FD Vs PPF: How to Choose the Best Between Them?

How to Apply for PPF Withdrawals?

For partial withdrawal or maturity withdrawal, follow these steps:

1. Fill out Form C (for partial withdrawal) or Form 2 (for full withdrawal).
2. Submit the form to your bank or post office.
3. Provide supporting documents, if required (like medical or education proof for premature closure).
4. Wait for approval (typically takes a few working days).

PPF is a fantastic savings tool but knowing the withdrawal rules can help you make better financial decisions. If you don’t need the money urgently, keeping your PPF intact will ensure you get the full benefit of compounding. But if you do need funds, knowing your options can save you from penalties and financial stress.

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FAQs on PPF Withdrawal Rules

Can I withdraw 100% from PPF?

Yes, but only after 15 years when the account matures. You can withdraw the full amount, including principal and interest, without any restrictions. If you extend the account, withdrawal rules change.

How much may I withdraw from PPF every year?

Before maturity: 50% of the balance at the end of the 4th year or preceding year, whichever is lower.

PPF withdrawal rules after extension of 15 year:

• Without contribution: Unlimited withdrawals.
• With contribution: Up to 60% of the balance at the time of extension over 5 years.

Can PPF be closed prematurely?

Yes, under specific conditions like:

• Medical emergencies (self/spouse/children)
• Higher education (proof required)
• Becoming an NRI

However, a 1% penalty on interest applies to the total amount.