Public Provident Fund (PPF) savings scheme is a better investment instrument that gives investors a chance to make money on long term investments. Interest on PPF schemes is paid by the government every quarter. The interest rate on PPF was fixed at 7.1% from April 1 to June 31 in the first quarter of FY21. PPF has 15 years of maturity, but investors are allowed to make partial withdrawals. An investor may also request its closure prematurely in certain situations.
Partial withdrawals and closures:
Generally, withdrawals can be made after a maturity period of 15 years from the date of opening of the account. However, partial withdrawals can be made at the end of the 6th year from the date of opening of the account. An investor can opt to prematurely close the PPF account for a medical emergency or educational needs. PPF investors are allowed withdrawals from the beginning of the seventh financial year every year. This withdrawal may be less of the following.
Prematurity Closing:
PPF account can be closed before the maturity date. The PPF account is allowed to be closed before the maturity date or time after five years from the end of that year. However, premature closure is allowed only if the investor needs funds to treat diseases after showing proper documents proving the medical condition. In the second case, if the investor or account holder needs money for higher education in a recognized institution in India or abroad, premature closure is allowed. PPF belongs to the exempt-exempt-exempt (EEE) tax benefit category.
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