Introduction
The Public Provident Fund (PPF) is a popular savings scheme in India, started by the National Savings Institute of India’s Ministry of Finance in 1968. It’s known for its good interest rates, tax benefits, and long-term savings potential. Understanding how to check your PPF balance and knowing the withdrawal rules can help you make the most of this investment.
Understanding Your PPF Balance:
Your PPF balance is the total money in your account, including the amount you deposited and the interest earned. Regularly checking your balance helps you keep track of your investment and plan your finances better.
Why Check Your PPF Balance?
- Monitor Interest Earned: You can see how much interest you’ve earned, which is updated every three months. This shows how well your investment is growing.
- Forecasting Maturity Corpus: Knowing your balance helps you estimate how much money you’ll have when your PPF account matures after 15 years.
- Facilitating Partial Withdrawals: Checking your balance is important if you want to make partial withdrawals after the 5th year.
- Availing Loans Against PPF: From the 3rd to the 5th year, you can take loans against your PPF balance. Knowing your balance helps you see how much you can borrow.
How to Check Your PPF Balance:
Online Methods:
Internet Banking:
- Link your PPF account to your internet banking.
- Log in to your bank’s online portal.
- Go to the PPF account section to see your balance and transaction history.
- Mobile Banking Apps:
- Many banks let you check your PPF balance using their mobile apps, making it easy to check on the go.
Offline Methods:
Bank Branch Visit:
- Go to the bank where your PPF account is.
- Present your passbook to get it updated with your latest balance and transactions.
Post Office Visit:
- If your PPF account is with a post office, visit the branch and update your passbook to see your latest balance.
PPF Withdrawal Basics:
- Full Maturity Withdrawal: PPF accounts mature after 15 years. You can withdraw the entire amount or extend the account in 5-year blocks.
- Partial Withdrawals: Allowed after 6 years from the account opening date. You can withdraw up to 50% of the balance at the end of the 4th year before the withdrawal or the 4th year from the current date, whichever is lower.
PPF Withdrawal Rules on Extension:
- Simple Extension: Extend the account by 5 years without adding more money. You can withdraw once a year up to the balance before the extension.
- Extension with Contributions: Continue to add money after extension to increase your savings and earn interest on both new and existing amounts. Submit Form H within a year of maturity to keep contributing.
Procedure for PPF Withdrawal:
- Submit Form C: Download Form C from your bank’s website and submit it at your PPF account branch.
- Provide Account Details: Specify where you want the withdrawn amount to be credited.
- Enclose Passbook Copy: Include a copy of your PPF passbook for verification.
Tax Implications on PPF Withdrawals:
Withdrawals, both partial and full, are tax-free under Section 80C of the Income Tax Act, 1961. PPF operates under the Exempt-Exempt-Exempt (EEE) category, meaning deposits, interest, and withdrawals are all tax-free.
Premature Termination of PPF Account:
You can close your PPF account early after 5 financial years for reasons like medical emergencies or higher education. Premature withdrawals come with penalties and should be considered carefully.
Conclusion
Regularly checking your PPF balance and understanding the withdrawal rules can help you manage your money better. By using the benefits of PPF wisely, you can secure a bright financial future. Stay proactive, make informed decisions, and make the most of your PPF investments to reach your financial goals confidently.
Disclaimer: The views expressed here are of the author and do not reflect those of Dhanvantree. Mutual funds are subject to market risks, please read the scheme documents carefully before investing.