New Delhi14 minutes ago
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In the Corona era, people are facing problems related to money. In such a situation, people are planning to withdraw money from their Public Provident Fund (PPF) to meet the need of money. But before doing this, you should know about the rules for premature withdrawal of money from PPF and the charges levied on it. We are telling you about pre-maturity withdrawal from PPF.
Cannot withdraw money before 5 years
Money cannot be withdrawn from this account for 5 years after the year of opening the PPF account. After completion of this period, money can be withdrawn by filling Form 2. Money can be withdrawn in these situations
have to pay fine
However, if you withdraw money before 15 years, 1% will be deducted from your fund. Meaning if a person was getting interest of 7.1 on the current contribution, but if he closes the PPF account prematurely, then he will get only 6.1% interest. That is, you can withdraw money after 5 years.
Is there a facility to take loan against PPF account?
You can also take a loan against the deposit in the PPF account. You are entitled to take a loan from PPF from one financial year after the end of the financial year in which you have opened the PPF account till the end of the fifth financial year. If you have opened PPF account in January 2017, then you can take loan from 1st April 2018 to 31st March 2022. You can take a maximum loan of 25% on the deposit.
When taking a loan against PPF, the principal amount of the loan has to be repaid first, followed by interest. The principal can be repaid in two or more instalments or in monthly instalments. The principal amount of the loan has to be repaid within 36 months from the month in which the loan is taken. The effective interest rate for the loan is only 1% higher than the interest on PPF. Interest can be paid in two monthly installments or in lump sum. If you have repaid the loan principal within the stipulated time, but some part of the interest is due, then it is deducted from your PPF account.