Today I am going to make you familiar with the rules and regulations for PPF loan and withdrawal. I felt it necessary as a lot of PPF investors were not aware about the exact rules of loan and withdrawal. Even I too faced difficulty in understanding these basic things during my CFP preparation.
Suppose you opened the account on 22/12/2011 table below will give you a simple example of when you can withdraw and take a loan. If you add 15 yrs (Term of PPF account) to your account opening date it will be 22/12/2026 which you think maturity date. However, it will mature on 1st April 2027 (which is the first working day of FY 2027-28). Therefore, it is exactly not 15 years but in practical it is around 16 years.
Withdrawal will be available from seventh FY onward. Only one withdrawal is permissible. The amount of withdrawal will be lower of the immediately preceding fourth FY balance or the immediately preceding FY balance. Therefore, from the above table, you may have noticed that a loan will be available from the 3rd FY to the 6th FY. That is 25% of the year-end balance preceding 2 years of loan-taking FY. You will have to repay a loan within 36 months and the interest is more than what you are getting from the PPF account. You will not get one more loan until you repay the existing loan. From the seventh FY you are not eligible to take a loan.
Note– Effective from 1st April 2016, one can close the PPF before maturity. But this will be permitted in genuine cases like a serious ailment, higher education of children, etc, In addition, if you try to close the PPF before maturity, then there will be a 1% reduction overall amount as a penalty. This closure is allowed only to those accounts, which completed a minimum 5 years of a term.
1% reduction of interest from a whole amount as a penalty for earlier closure is unwarranted. Because it is already set that such closure will be allowed in genuine cases. Then why such a penalty clause?
Hope my sharing will help you all 🙂
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Hi sir, i opened ppf 2014 & made 1st partial withdrawal 2020 50% of 4th year end , i want to withdraw again in 2021 may . Is it possible sir. Please sir . Help me.
Dear Nagasai,
Yes, but subject to the above rules. Please check the above post again.
Sir,
I have opened my PPF Account in SBI (2008)
Now There is Amout is Rupees 11 lac,
I have no job for last 6 month and then I need money for home & Education.
Pl suggest me Sir, What I should do?
Pl guide me?
Thanks
Dear Ram,
You can opt for either loan or withdrawal as per above post.
Hi Basavraj,
I opened PPF account with SBI on 3Jan 2012 which is maturing on 1Apr 2027. Two months back I moved abroad on a permanent basis.
My Questions are:
1. Can I withdraw the entire amount ONLINE and close the PPF account.
2. if not possible ONLINE, what are other alternatives?
3. Can my family member or friend do this (Withdraw money and close ac) on my behalf by visiting SBI branch in India. If yes, then what is required from my end and can they visit any SBI branch in Inidia or where my PPF a/c is held?
Thanks
Dear Gurwinder,
1) You have to wait up to maturity for the closure.
Ok,
1. Can I withdraw partial amount online.
2. if not online, can my family member withdraw partial amount on my behalf and what is required from my end.
3. if family member can withdraw on my behalf, Do they need to visit home or any SBI branch?
Thanks in advance.
Dear Gurwinder,
Sadly you can't withdraw it online and family members are also not allowed.
Sir can I redeposit money withdrawn from ppf account... kindly clarify
Dear Shabir,
Yes but if you are repaying such advance, then you can always redeposit.
I have open a PPF account at SBI.15yrs. completed on1.04.2011.extended 5yrs + another 5yrs. Now maturity date is 1.04.2021.
Became job less creature, Very badly I need money to survive. Can I close my PPF account & withdraw money ? if yes then how please.
kindly help me asap.
Dear Harasit,
Refer my post "Premature closure of PPF account – New Rules 2016".
Sir,
What is time gap required to pay PPF loan Interest amount after payment of Principal amount?
Dear Naidu,
Nothing like that. At maturity, you will receive both interest and principal.
I opened a ppf account in 2010 in an SBI branch in Hyderabad. I wish to do partial withdrawal now. But I’ve relocated to Bangalore. Can i do the partial withdrawal from any SBI branch in Bangalore. What is the procedure for that?
Kutty-It is the procedural issue. Check with the Bank.
I have an EPF account but as the current employer has no EPF provision so I have not contributed any amount towards my EPF a/c since last two years.As I am planning to purchase a flat so please suggest whether i would close the EPF a/c by withdrawing the total accumulated amount or continue the EPF a/c with partial withdrawal.
Das-You can close it by withdrawing if you need.
Dear Sir can you tell me SBI ppf loan product code.
Gajesh-PPF loan rules apply to all bank and Post Office. There is no special rules for SBI.
thanks a lot sir for sharing this information i am holding PPF account in SBI bank since 1 year . i was searching for loan against the balance accumulated in my account.
Sir Ppf ac opening date was july 2006 amount till date july 2020 is 450000.Bank says i am elegible only 147000 out of it.Plz guide.
Thanks
Dear Dhananjay,
Let them give in writing and cross-check with what I have shared in the above post.
Human-Refer above post.