PPF Withdrawal Guidelines: Online Withdrawal Process

Source: livemint

During a liquidity crunch or medical emergency, you may need to rely on your ongoing Public Provident Fund account savings. At such times, knowing the PPF withdrawal process is crucial.

Remember that you can withdraw your PPF only in certain specific conditions. In today’s article, we will familiarise readers with this integral topic.

Let’s begin right away!

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A PPF account reaches maturity after a tenure of 15 years. Therefore, on maturity, you can easily avail of a PPF account withdrawal of your entire corpus.

Let’s say you wish to withdraw the entire sum standing to your PPF account’s credit along with the accrued interest. You can withdraw this entire amount freely and close the account as soon as it reaches maturity.

Furthermore, you can avail of withdrawals easily, either online or offline. We’ll now delve into each of these processes.

Online Withdrawal Process

Currently, financial institutions further simplify this task by offering PPF withdrawal online. To avail of this facility digitally, simply follow these steps:

• Step 1: Log into your online banking platform.
• Step 2: Navigate and find the particulars of your PPF account.
• Step 3: The portal will indicate if you are eligible for withdrawal (which you should be when you withdraw your PPF on maturity).
• Step 4: Proceed to download, fill, and then submit the PPF withdrawal form called form C.
• Step 5: The bank and the PPF office will then cross check all the details and match the signatures to cross check the applicant’s eligibility.
•  Step 6: Once eligibility is confirmed, the amount will be credited to the account holders savings account.

These steps show how to withdraw PPF online.

Offline Withdrawal Process

If you want to take advantage of the offline procedure, simply do the following -

• Step 1: Visit your concerned banking institution and collect a Form-C.
• Step 2: Fill up this form and submit the same.
• Step 3: Concerned Officials will cross check and verify all the details and credentials on the form and match the signatures to confirm the eligibility.
• Step 4: After passing by the concerned authority, a demand draft or a direct transfer to the account holder;s savings account will be made depending on the mode of payment selected.

This is how you can withdraw PPF offline.

Moreover, it is critical to fill out this form correctly. Familiarizing yourself with the various PPF account withdrawal rules can help you significantly. For ease of understanding, different sections of the withdrawal form are explained below:

1st Section: Declaration

Here, you must enter your PPF account details and your reason for withdrawal. Additionally, this section calls for you to specify the number of years that your account has been operational.

2nd Section: Official Use

It contains details like the representative official’s signature, the total amount of money withdrawn so far, available account balance on date, date of withdrawal request, etc.

3rd Section: Acknowledgement and Bank Details

Under this section, the applicant acknowledges that he received the amount specified in his below mentioned bank account on the given date. He must furnish the bank account details wherein the withdrawal amount will be credited. Furthermore, it requires you to fill out details of the issued cheque or DD.

You can also submit this form at the nearest branch of your bank. This will allow the bank to process your application quickly.

Alternatively, you can ditch the online route and opt for a completely offline procedure. Simply head over to a branch of your bank in your vicinity. The representative will require you to fill out and submit a physical PPF withdrawal form called form C.

You will receive the PPF amount as soon as your application is verified and processed.

Note: The same rules apply even if you have a PPF account with a post office.

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Alongside complete withdrawals, a matured PPF also offers you the option to extend the term for your account. You can make this extension to your PPF account for as long as you wish to, though in blocks of 5 years.

Additionally, if you do not withdraw your PPF from your account and close it, it is extended by default as per regulations.

Besides, you can choose to extend the PPF account with or without contributions, as elaborated below.

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PPF extension with contributions implies that you can keep the account active after maturity without making any more deposits after maturity. Moreover, this account will continue to earn interest on its accumulated balance amount. As a result, you keep earning interest on your overall corpus until you wish to make a withdrawal after a simple extension.

On the other hand, you can keep your account active after maturity by making periodic contributions or deposits to it. However, you can only avail of this facility by submitting form H. Furthermore, you must undertake this extension within one year of your PPF’s original maturity date.

You must also note here that in case you fail to submit form H, you cannot deposit further amounts to your PPF account.

Moreover, any contributions made during this period are to be deemed irregular. As a result, they do not earn you any interest or tax deductions under Section 80C. Additionally, if you continue contributing to this account for over a year after its maturity, you will lose the option to make further deposits.

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PPF Withdrawal Rules After Extension without a Contribution

After extending your PPF account in a block of 5 years, you can withdraw a certain amount up to its balance at the time of an extension. PPF withdrawal rules during an extended period only allow you to make one withdrawal in a year. Moreover, there is no cap on the withdrawal amount.

For example, let’s say that you opened your PPF account in 2000. In 2015, it accumulated a balance of ₹20,00,000. Thereafter, you decided to extend it from 2015 to 2020 without contribution. In this case, you will only be allowed a PPF withdrawal of an amount up to ₹20,00,000 once a year during an extension period.

PPF Withdrawal After Extension with a Contribution

If you extend your PPF account with contribution, you can only withdraw 60% of its accumulated balance at the time of an extension. However, you can only make one withdrawal per year over an extended period. 

For instance, assume that you opened a PPF account in 2000, and it accumulated ₹20,00,000 in 2015. Now, you opted for an extension to 2020, with contributions. This would allow you to make withdrawals each year over the 5-year extension period. Additionally, you cannot withdraw more than 60% of the balance amount, i.e., ₹1,20,000.

But what can you do if you require funds and wish to withdraw before a term of 15 years? Do not worry; there are PPF withdrawal rules from such a circumstance as well. So, allow us to elaborate on them.

Subscribers of the scheme, who wish to make a partial PPF withdrawal from their account, must wait till 5 years from its opening date. Moreover, PPF partial withdrawal rules also mandate one to acquire only up to 50% of the PPF account’s available balance at the end of the 4th year. 

Additionally, when availing of a premature PPF withdrawal, you must note that only one withdrawal is permitted in a financial year. If you intend to take advantage of this facility, keep the above-mentioned PPF account partial withdrawal rules in mind.

To withdraw your PPF partially, you can follow the following steps:

• Step 1: Contact the bank with which you have a PPF account. You can reach out via the bank’s online portal or by visiting its nearest branch.
• Step 2: At this point, you are required to fill out a PPF partial withdrawal form called form C. You must note that form C is the same form, which is submitted during a full withdrawal.
• Step 3: Ensure that all details are entered correctly. 
• Step 4: Submit this application form along with your passbook.

This concludes the process for the partial withdrawal from a PPF account. Your withdrawal will be approved as soon as your bank verifies all the credentials provided.

Note: The same procedure is applicable if you have a PPF account with a post office.

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It is recommended that subscribers opt for a PPF closure after the extension or on maturity to avail of the scheme-related benefits. However, they also have the option to close your PPF account prematurely after 5 financial years, albeit under some specific grounds:

• An account holder, his/her children, or spouse are suffering require treatment for a serious illness, life-threatening ailment, or any such medical emergencies.
• A subscriber wishes to finance his/her children’s higher education. In this case, the individual must submit the documents confirming the child’s admission to a college or university.

That being said, we must also highlight here that you will face a penalty for premature closures. A 1% penalty is levied on your PPF account’s actual rate of interest.

For instance, if you were earning an interest of 8% on contributions, its rate will reduce to 7% when you close the PPF prematurely.

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This sums up our guide on the nitty-gritty of PPF withdrawals. We hope that you now have a crystal-clear understanding of this subject and can withdraw your PPF without any hindrance.

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