Public Provident Fund, or PPF, was launched in 1968 and has won the trust of generations, thanks to the sovereign guarantee on capital and returns and its ability to multiply funds invested in the long-term. It is designed for investments over a long time, during which the force of compounding plays out fully. While the scheme has an initial lock-in period of 15 years, it can be extended by blocks of 5 years which can be extended almost indefinitely.
However, emergency situations might crop up in the lives of the PPF account holder who might need to take out money from the scheme. Though the PPF account is basically illiquid, the designers of the scheme have thought out carefully as how and when can one withdraw funds prematurely. Can I withdraw money from PPF before maturity, is a common question among depositors. Let’s have a look at the terms and conditions which an investor in PPF must know.
Special situations when early withdrawal is allowed
Partial withdrawals are allowed from the PPF 5 years after opening the account under the following extraordinary circumstances. What’s more the maximum amount that can be withdrawn is limited to 50% of the money that has been accumulated in the PPF account at the end of year four starting from the date of account opening. Also only one partial withdrawal is allowed in one financial year. Therefore, the answer to the question “Can I withdraw money from PPF before maturity?” is Yes, but with conditions.
Treatment of life-threatening disease
If the PPF account holder, or the spouse of the account holder, of his/her children or parents suffer from serious illness, the subscriber to the PPF account can withdraw money from the account for treatment. However, one has to furnish documents to support the claim.
Higher education
If funds are needed to fund higher education of the children of the PPF account holder, he or she can withdraw funds before they mature. Funds can be withdrawn even if the accountholder has to fund higher education for himself/herself. It is completely possible since the parents of a kid can open a PPF account and invest a maximum of Rs 1.5 lakh in it. However, rules state that documents have to be produced to prove admission at a recognised institute of higher education in India or abroad.
Public Provident Fund, or PPF, is an instrument for building long-term funds in a condition of full security guaranteed by the government. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
