Planning to open a PPF account? Here are lesser-known things you should know
The minimum Amount for opening a PPF account is Rs 500. You can have a maximum balance of Rs. 1.5 lakh in your PPF account in a single financial year. This maximum limit applies to contributions made both to their account and any account they have opened on behalf of a minor. However, you cannot open a joint account under this scheme.
Yes. An account holder may apply for a loan in Form-2 any time after 1 year but before 5 years from the end of the year in which the initial PPF subscription was made. The loan amount must not exceed 25% of the balance standing to the credit of the account at the end of the 2nd year immediately preceding the year of application.
A fresh loan cannot be availed until the previous loan, including interest, is fully repaid, and only 1 loan may be taken in a year. Also, the loan principal must be repaid within 36 months from the month following its sanction, either in full or via instalments.
After 5 years from the end of the year in which the account was opened, the account holder may apply in Form-2 for a withdrawal not exceeding 50% of the balance at the end of the 4th preceding year or the previous year, whichever is lower. Any outstanding loan and interest must be repaid before withdrawing, and this facility is allowed only once per year and only from active (non-discontinued) accounts.
After 15 years from the end of the year the account was opened, the account holder may close the account by submitting Form-3 and withdraw the entire balance along with interest up to the last day of the preceding month. Alternatively, they may retain the account without making further deposits. This will allow them to continue earning interest as per the scheme, with 1 withdrawal permitted each year.
Premature closure of an account is allowed after five years for reasons such as life-threatening illness, higher education, or a change in residency status. However, it has to be supported by valid documents. Closure must be requested via Form-5, and the interest paid will be 1% less than the rate originally credited.
