The best time to invest in the PPF account is between the 1st and 5th of April in any financial year, as you will be making the most of the time before the interest accrues.
While it is easy to check your PPF account statement online, the rules relating to withdrawal also must be kept in mind, lest you feel too tempted to withdraw your corpus.
- Partial withdrawals can be made, from the start of the 7th financial year after the account has been created. It is important to keep in mind that the timeframe taken into consideration is “financial year” which is from the 1st of April – to the 31st of March the next year.
- For example, if Mr. A has created a PPF account in January 2010, he will only be able to withdraw from his account from the 1st of April 2015.
- Mr. A’s PPF account was opened in January 2010, which means that it was opened in the financial year 2009 – 2010. The number of financial years, counted from when he opened the account will be as follows:
- Year 1: April 2009 – March 2010 (Account opened within this timeframe – in January 2010).
- Year 2: April 2010 – March 2011.
- Year 3: April 2011 – March 2012.
- Year 4: April 2012 – March 2013.
- Year 5: April 2013 – March 2014.
- Year 6: April 2014 – March 2015.
- Year 7: April 2015 – April 2016 (Mr. A can begin withdrawing from his PPF account from this date).
- Only one partial withdrawal will be allowed every financial year (starting from the 7th financial year onwards). Considering the above example of Mr. A, he will only be able to withdraw from his PPF account once every year, starting from April 2015.
The amount that can be withdrawn is equal to the lower of:
- 50% of the account balance as at the end of the year immediately preceding the current year, or,
- 50% of the account balance as at the end of the 4th year, immediately preceding the current year.
As in the above example with Mr. A:
- Year 1: April 2009 – March 2010 (Account opened within this timeframe – in January 2010).
- Year 2: April 2010 – March 2011.
- Year 3: April 2011 – March 2012 (This is the 4th year immediately preceeding the year in which withdrawals are possible, assuming Mr. A opted for withdrawal option as soon as he legally could. Mr. A can withdraw an amount equal to 50% of this amount if it is lower than that of “Year 6”).
- Year 4: April 2012 – March 2013.
- Year 5: April 2013 – March 2014.
- Year 6: April 2014 – March 2015 (This is the year immediately preceding the year in which withdrawals are possible, assuming Mr. A opted for the withdrawal option as soon as he legally could. Mr. A can withdraw an amount equal to 50% of this amount, if it is lower than that of “Year 3”).
- Year 7: April 2015 – April 2016 (Mr. A can begin withdrawing from his PPF account from this date).
- The PPF account attains maturity in 15 years from the date on which it was created.