The Public Provident Fund (PPF) is a long-term savings scheme with a lock-in of 15 years. However, investors may need access or withdraw funds before maturity. This can be done in two ways:
Both options are very different. Let’s understand Partial Withdrawal vs Premature Closure in PPF in detail.
Example:
If you opened a PPF account in April 2015, you can make your first withdrawal in FY 2022-23 (after 7 financial years).
If your balance is ₹4 lakh, you can withdraw up to 50% = ₹2 lakh.
Example:
If your account earned 7.1% interest for 8 years, and you close it prematurely, the interest will be recalculated at 6.1%. You lose 1% per year on the whole balance.
| Feature | Partial Withdrawal | Premature Closure |
|---|---|---|
| When Allowed | After 7 financial years | After 5 financial years |
| Amount | Up to 50% of balance | Full balance |
| Frequency | Once per financial year | One-time closure |
| Account Status | Continues till maturity | Closed permanently |
| Conditions | No special reason required | Only for medical, education, or NRI |
| Penalty | No penalty | 1% lower interest on entire balance |
| Best For | Short-term needs without breaking account | Emergency or unavoidable situations |
PPF is meant for long-term saving. You can:
Yes, but only partially.
Partial withdrawals are allowed after completion of a specific lock-in period
You cannot withdraw the full amount before maturity
The amount depends on your balance from earlier years.
Banks calculate it as per government rules, not randomly.
No.
Partial withdrawals are tax-free
Maturity amount is also completely tax-free
You can apply:
Usually, you need:
Yes, but only in specific situations, like:
Yes.
The interest rate is reduced slightly
The final amount becomes lower than normal maturity value
You have three options:
Usually, the amount is credited within a few working days, depending on the bank or post office.
The Public Provident Fund (PPF) is a long-term savings scheme with a lock-in of 15 years. However, investors may need access or withdraw funds before maturity. This can be done in two ways:
Both options are very different. Let’s understand Partial Withdrawal vs Premature Closure in PPF in detail.
Example:
If you opened a PPF account in April 2015, you can make your first withdrawal in FY 2022-23 (after 7 financial years).
If your balance is ₹4 lakh, you can withdraw up to 50% = ₹2 lakh.
Example:
If your account earned 7.1% interest for 8 years, and you close it prematurely, the interest will be recalculated at 6.1%. You lose 1% per year on the whole balance.
| Feature | Partial Withdrawal | Premature Closure |
|---|---|---|
| When Allowed | After 7 financial years | After 5 financial years |
| Amount | Up to 50% of balance | Full balance |
| Frequency | Once per financial year | One-time closure |
| Account Status | Continues till maturity | Closed permanently |
| Conditions | No special reason required | Only for medical, education, or NRI |
| Penalty | No penalty | 1% lower interest on entire balance |
| Best For | Short-term needs without breaking account | Emergency or unavoidable situations |
PPF is meant for long-term saving. You can:
Yes, but only partially.
Partial withdrawals are allowed after completion of a specific lock-in period
You cannot withdraw the full amount before maturity
The amount depends on your balance from earlier years.
Banks calculate it as per government rules, not randomly.
No.
Partial withdrawals are tax-free
Maturity amount is also completely tax-free
You can apply:
Usually, you need:
Yes, but only in specific situations, like:
Yes.
The interest rate is reduced slightly
The final amount becomes lower than normal maturity value
You have three options:
Usually, the amount is credited within a few working days, depending on the bank or post office.
