The Public Provident Fund (PPF) is one of the most reliable long-term savings schemes in India. It comes with a 15-year lock-in period, which encourages disciplined savings. But life is unpredictable – and many people wonder: Can I withdraw money from PPF before 15 years?
The answer is yes, but only under specific conditions. Withdrawals from PPF before maturity are allowed through partial withdrawals, premature closure, or a loan against PPF. Each option has its own rules and limits.
Quick Overview of PPF Withdrawal Rules
| PPF Withdrawal Type | When Allowed | Conditions |
|---|---|---|
| Partial Withdrawal | From 7th financial year | 50% of balance (special calculation rules apply) |
| Premature Closure | After 5 years | Allowed for education, medical treatment, or NRI status; 1% interest penalty |
| Loan Against PPF | Between 3rd and 6th year | Up to 25% of balance at end of 2nd year; repay within 36 months |
Types of PPF Withdrawals Before 15 Years
There are three ways to withdraw money from your PPF account before maturity:
- Partial Withdrawals – Allowed from the 7th financial year, up to 50% of your eligible balance.
- Premature Closure – Permitted after 5 years for higher education, medical emergencies, or if you become an NRI. A 1% penalty on interest applies.
- Loan Against PPF – Available between the 3rd and 6th years, up to 25% of the balance at the end of the 2nd year.
Let’s explore each ppf withdrawal type in detail with examples.
PPF Partial Withdrawal Rules
Partial withdrawals from PPF are allowed from the 7th financial year. The maximum withdrawal amount is 50% of your balance, calculated as the lower of:
- 50% of the balance at the end of the 4th financial year, OR
- 50% of the balance at the end of the previous financial year
Example: Partial Withdrawal from PPF
- If PPF account opened in FY 2017–18
- Withdrawal eligibility begins in FY 2023–24
- Balance at end of 4th year (FY 2020–21): ₹2,40,000
- Balance at end of previous year (FY 2022–23): ₹3,20,000
- Maximum withdrawal allowed = 50% of ₹2,40,000 = ₹1,20,000
Even though your ppf balance is ₹3,20,000, you can withdraw only ₹1,20,000.
Premature Closure of PPF Account
Premature closure of PPF is allowed only after 5 years of account opening and under specific conditions:
- Higher education expenses of self or children
- Medical treatment of serious or life-threatening diseases
- If the account holder becomes an NRI
A 1% reduction in the interest rate applies to the entire duration of the account.
Example: Premature Closure of PPF
- PPF account opened: FY 2018–19
- Eligible for premature closure: FY 2023–24
- Total balance: ₹5,00,000
- Interest penalty: 7.1% → 6.1%
- Final payout: Approx. ₹4,80,000–₹4,85,000
Loan Against PPF (Alternative to Withdrawal)
Between the 3rd and 6th years, you can take a loan against your PPF account. This is often a better option than withdrawal since it doesn’t permanently reduce your savings.
- Loan amount: Up to 25% of balance at end of 2nd year
- Repayment period: 36 months
- Loan interest rate: 1% higher than current PPF rate
Example: Loan Against PPF
- Balance at end of 2nd year: ₹80,000
- Maximum loan: ₹20,000
- Interest rate charged: 8.1% (if PPF rate = 7.1%)
Key Points on PPF Withdrawal Before 15 Years
- Partial withdrawals are allowed only from the 7th year.
- You can withdraw only once per financial year.
- Premature closure is allowed only after 5 years with valid reasons.
- Interest penalty of 1% applies on premature closure.
- Loan facility is available between the 3rd and 6th year as an alternative.
- All withdrawals and maturity proceeds remain tax-free.
FAQs on PPF Withdrawal
Q1. Can I withdraw the full amount from PPF before 15 years?
No, full withdrawal is only allowed at maturity. Before that, only partial withdrawals or premature closure are possible.
Q2. How much can I withdraw before maturity?
From the 7th year, you can withdraw up to 50% of your balance, as per calculation rules.
Q3. Can I close my PPF account after 5 years?
Yes, but only for higher education, medical treatment, or if you become an NRI. A 1% interest penalty applies.
Q4. Can guardians withdraw from a minor’s PPF account?
Yes, guardians can withdraw for the benefit of the minor, following the same rules.
Q5. Which is better – PPF loan or withdrawal?
Loans are better for short-term needs since they don’t reduce your corpus. Withdrawals permanently reduce savings.
Q6. How many times can I withdraw before maturity?
Only one withdrawal is allowed in a financial year after the 7th year.
Q7. Is PPF withdrawal before 15 years taxable?
No, withdrawals and maturity proceeds are tax-free. Only premature closure reduces your interest rate.
Q8. Can I withdraw money online from PPF?
Some banks allow online withdrawal requests, but in most cases you need to fill and submit Form C physically.
Q9. Can I withdraw from an inactive PPF account?
No, you must first reactivate the account by paying the minimum deposit (₹500 per missed year) and penalty (₹50 per year).
Q10. Can I withdraw PPF money for home purchase?
Directly, no. Withdrawals are only for education, medical needs, or partial withdrawals as per rules. For home purchase, you need to wait till maturity or use other funds.
The rules for withdrawing money from PPF before 15 years offer flexibility without compromising its long-term nature. You can withdraw partially from the 7th year, close prematurely after 5 years under specific conditions, or take a loan between the 3rd and 6th years. By understanding these rules and planning ahead, you can balance short-term needs with long-term financial security.
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