All posts by arshkapoor

PPF withdrawal rules

PPF withdrawal rules 2016

What is PPF?

Public Provident Fund (PPF) is a small saving scheme backed by the central government. It was initiated to provide retirement security to individuals and workers in unorganized sector.

PPF withdrawal rules

Some rules about PPF account-

  • It is a 15 years scheme.  Public Provident Fund (PPF) account gets matured after 15 years from the end of the year in which the account was opened.   However, on maturity this period can be extended any number of times for a block of 5 years each time.  This can be done by submitting “Form H” within a year from the date of maturity.
  • No premature closure of the account is allowed. Only in the case of the death of account holder, his/her nominee /legal heir can close the PPF account by submitting the required documents as guided by the Ministry of Finance.
  • You can have only one PPF account in your name in your entire life.
  • You can never have a joint account but can open a n account for a minor as his parent or guardian.
  • A minimum of Rs. 500 is required to open and maintain a PPF account yearly.
  • A maximum deposit of Rs. 1,50,000/ can be made in a PPF account in any given financial year.

Premature Closing Rules:

  • The account holder can close his/her PPF account prematurely after finishing 5 years, on grounds like higher education of children or may be medical treatment expenditure. It means individual can close his/her account before the time of maturity, which is 15 years. It is a good thing, but there are conditions to this exception. The premature closing will result in a penalty of 1 per cent of the interest on the whole deposit.

Withdrawal Rules:

  • Account holder can make withdrawals from the sixth year which means that from the day account holder opens his/her account, he/she needs to complete 6 full financial years before he/she can make any withdrawals.
  • Account holder is allowed to withdraw 50% of the balance at the end of the fourth year, preceding the year in which the amount is withdrawn or the end of the preceding year whichever is lower.
  • In a year only one withdrawal can be made.
  • The amount once withdrawn cannot be repaid.
  • On maturity that is after 15 years the entire fund can be withdrawn from the account.

For example, if an account was opened in the year 2004-05, and the first withdrawal was made during 2010-11, the amount that can be withdrawn is limited to 50% of the balance as on March 31, 2007, or March 31, 2010, whichever is lower.

Nominee and Death

  • In case of sudden death of the account holder, the amount that’s remaining as balance in the account of the deceased account holder can be claimed by his/her nominee or legal heir, even before expiry of 15 years. The account cannot be continued. If the balance in the account is more than 1 lakh, then the nominee or legal heir needs to prove identity and provide with the relevant documentation to claim the pending amount in the PPF account.

how to open PPD account

How to open PPF account ?

It is famously said that “The key to wealth creation lies in practice of saving regularly and systematically”.

The PPF (Public Provident Fund) is a long term investment plan offered by the Central Government for Indian residents only. The PPF investment plan falls under EEE status, wherein the investor enjoys the tax exemption on Principal, investment and withdrawal.


how to open PPD account


Investment in PPF can be done either through bank or Post Office. The bank needs to be authorised by Ministry of Finance to provide certain services in regards with Public Provident Fund. If you opt for opening the PPF account through bank then it can be done online too and to open the account in post office the post office should be double handed.

  1. To open PPF account in bank –
  • A PPF account can be opened through designated banks such as SBI (and its subsidiaries bank), ICICI bank, Punjab National Bank, Central Bank of India, Bank of Baroda etc.
  • It cannot be opened at any bank branch. It can be opened at only designated branches of the authorized banks. List of designated branch is made available on the Banks website or any branch of the Bank.
  • To apply for PPF account “Form – A” needs to be filled and submitted. This form is available at the designated branch.
  • Along with the form, ID proof (Pan Card, Driving License); Address Proof (Passport, Electricity Bill); two recent photographs needs to be carried.
  • A pay-in slip to transfer the amount for opening of the account. A minimum of Rs500 is required to open the account.


Once the account is opened, a passbook for PPF account is issued to the account holder. All transactions would be updated in the Passbook. It is required for claiming the tax deduction under section 80C of the Income Tax Act.

  1. To open PPF account in bank (Online) –
  • To open the PPF account online, one should have a savings bank account and subscription to net banking.
  • Submit all the documents (ID proof, Address Proof, Photographs) along with Form – A at the bank.
  • The payment then can be made through the linked savings bank account.

Making investment online is more convenient and easy. No passbook is given when the PPF account is opened online.

  1. To open PPF account at Post Office
  • The Post Office needs to be doubled handed and above, which means managed by a Post master and a clerk or more.
  • At the post office, all the documents (ID proof, Address Proof, Photographs) along with correctly filled Form needs to be submitted.
  • A payment of Rs500 is needs to be made to open the account, and then the post office will provide with the passbook. All the transactions would be recorded in the Passbook.

Anyone and at any age can apply for opening a PPF account. A minor too can have a PPF account which can be opened by either mother or father. One person can have only one PPF account. Joint PPF account is not permitted but one can assign a nominee in case of death of the account holder. A PPF account is among the most popular and safe way of long term investment as it backed by the government.

PPF interest rates 2016 - 17

PPF interest Rates for 2016-17

Public Provident Fund (PPF) is a popular long term investment plan which is backed by the Central Government of India. The PPF plan is a safe and secure investment plan along with attractive interest rate and returns that are completely exempted from Tax. The Investors can invest a minimum of Rs. 500 to a maximum Rs. 1,50,000 in a financial year and can get the facilities such as loan, withdrawal and extension of the account. The interest rate on the PPF is decided by the government and every year the new PPF interest rate is introduced with the beginning on new Financial Year.

PPF interest rates 2016 - 17

For the new financial year Apr 2016 – Mar 2017, the Interest rate on small savings schemes, including Public Provident Fund, Kisan Vikas Patra (KVP) and senior citizen deposits, will be cut by up to 1.3 per cent from 1st April 2016 as the government makes a move towards quarterly alignment of the rates with the market. The revised Interest rate on Public Provident Fund (PPF) will be 8.1 per cent for the period 1 April 2016 to 30 June 2016. The PPF interest rate is down from 8.7 per cent, which is previous financial year’s interest rate. Till the last financial year the interest rates were set for the whole year.  However, unlike previous years when the interest rates were set for the full year, the government has decided that from this year the interest rate will be revised every quarter, based on last 3-month yields on Government-Securities or G-Sec. The interest rate for every quarter would be declared on the 15th day of the preceding month. Interest rate for July-September quarter will be announced on 15 June 2016.

This year the government has also permitted the premature closure of PPF accounts but only “in genuine cases”, like if it is a case of serious ailment or may be higher education of children. As said by Minister of Finance, “This shall be permitted with a penalty of 1 per cent reduction in interest payable on the complete deposit and applicable only for the accounts having completed five years from the date of opening.”

Well, it was necessary for the Government to reduce on the Interest Rate as this will enable the banks to apparently reduce their deposit rates and extend the loan and credit to public and the borrowers at lower rates.

PPF Interest Rates

Here are the PPF Interest rates for Past 10 years

PPF interest rates

Year PPF Return
2007-2008 8.50%
2008-2009 8.50%
2009-2010 8.50%
2010-2011 9.50%
2011-2012 8.25%
2012-2013 8.75%
2013-2014 8.75%
2014-2015 8.75%
2015-2016 8.75%
2016 onwards 8.1%