Premature Withdrawal and Closure Rule In Public Provident Fund (PPF)
With the PPF now people have the alternative of discontinuing the deposit plan after finishing 5 years on several grounds like higher education of children or medical treatment expenditure. You can avail this facility but with a penalty of 1% less interest on all the preceding years. This is a of course a great news as the blocking time in PPF was a big disadvantage.
Premature Closure and Withdrawal of PPF
- Now you can Withdrawal entire money after 5 years of opening PPF account. With 1% Penalty on the interest amount
- You can close you account and withdraw entire amount after completion of 15 years.
- Account can be pre matured on the case of death of the account holder
- You can withdraw 50% of the amount after 7 years of completion of account.
Currently, premature conclusion of the scheme is permitted. Officers of the department of post stated that the plan that does not require any limitation of age, can as well be opened on the children’s name through their parents. Subscribers can save from ₹500 to ₹1.5 lac in 12 months for which 8.75% of interest is given. Please check this for current PPf interest rate.
Though, the TN region has merely 1.78 lakh of PPF account holders of which a large piece were opened in Chennai only. Sources stated that the long-term scheme of savings had not touched the countryside as well as suburban areas. Although, the government of India has determined to recalibrate the rate of interest of the schemes of small saving from 1st April, subscribers’ might benefit from the same rate of interest in order to save in the PPF.
Features of PO PPF Account
|Plan/Scheme||Periodicity, Interest rate payable, etc.||Min. Sum to open an account and max balance to be maintained||
Prominent features including Rebate on Tax
|15 year PPF Account||From 1 April, 2014, rates of interest are
8.70% yearly (compounded yearly).
|Min ₹500, Max ₹1,50,000 in a fiscal year.
One can deposit in lump-sum/12 installments.
|Any person is able to open a PPF account with ₹100 however he/she must deposit min. of ₹500 in a monetary year and max. ₹1,50,000
Joint account is not allowed to be opened.
An Account is opened by cheque/cash and In cheque, the realization date of the cheque in government account will be the account opening date.
Facility of nomination is available. Accounts can be shifted from one PO to other.
The depositor can open additional account on his/her children’s name however subject to highest investment limitation.
Maturity time is fifteen years however the same is able to be stretched for more 5 years within 12 months of maturity.
Value of maturity can be maintained without extension as well as without additional deposits as well.
Premature conclusion is not permitted before fifteen years.
All the deposits are eligible for deduction under 80C of Income Tax Act.
Interest rate is completely free of tax.
Withdrawal is allowed each year from the seventh fiscal of opening the account..
Facility to take Loan is available from the third fiscal year.
No addition under the order of court decree.
The account of Public provident Fund can be easily opened in any Post Office. If you find any difficulty then you can contact post master for help.