You can withdraw from your PPF starting from the seventh year. So, if you go back to our above-mentioned example, for an account that was opened in 2014-15, the withdrawal facility will start from the April 1, 2020.
There are limits on the amount of money that you can withdraw from the account.
As per the PPF scheme rules, a person can withdraw lower of the following:
a) 50 per cent of the balance available at the end of fourth year immediately preceding the year of withdrawal; or
b) 50 per cent of the balance stood at the end of the preceding year
For instance, if your PPF account was opened during the financial year 2011-12 and if you visit the branch any day during FY2017-18 to apply for a loan, then the amount you are eligible will be calculated as:
If there is any loan taken by the subscriber earlier which remains unpaid at the time of withdrawal, then it will be subtracted from the withdrawal amount he/she is eligible for. Further, this facility is available only once a year.
Premature closure of PPF account
As per earlier rules, a PPF account could not be closed before maturity of 15 years. However, the government, by amending the Public Provident Fund Act in 2016, has allowed premature closure if either of these conditions are met:
a) The account must have completed five financial years and,
b) The amount is required for the treatment of serious ailments or life-threatening disease of the account holder, spouse, dependent children or parents, or,
c) For higher education of account holder or in case of a minor account holder.
However, there is a catch. You will not get the full amount as shown in your account. As per the amended rules, if a person wishes to use the premature withdrawal facility, he or she will be subjected to one percent less interest rate from the interest rate as applicable to him in case he or she has not opted for the facility.
This can be explained as follows for an account opened in the financial year 2011-12:
From the above table it is clear that since you have opted for the premature withdrawal facility, the interest applicable for your deposits have been reduced by 1 per cent (from 8.60% to 7.60% in FY 2011-12 and so on).
Had you not exercised the option of premature closure the balance shown in your account for the FY 2016-17 would be as:
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