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Today I am going to make you familiar with rules and regulation of withdrawal and loan facilities of PPF. Why I felt this topic necessary is, while preparing my final module of CFP I didn’t get the clear information about this in my notes, also when I googled it. All have copied the same wordings which are somewhat confusing to common man. Hence today I will tell you with example.

Suppose you opened the account on 22/12/2011 and below table will give you simple example when you can withdraw and take loan. If you add 15 yrs (Term of PPF account) to your account opening date it will be 22/12/2026 which you think maturity date. But it will mature on 1st April 2027 (which is first working day of FY 2027-28). So, it is exactly not 15 years but in practical it is around 16 years.

Financial year Year End Balance in your PPF account (Assumptions for better  understanding) Is it eligible for loan? Is it eligible for withdrawal? How much eligible?
2011-12 Rs.75,600 -No- -No- NA
2012-13 Rs.1,58,000 -No- -No- NA
2013-14 Rs.2,20,000 Yes -No- Rs.18,900 (25% of 2011-12 year end balance)
2014-15 Rs.3,10,000 Yes -No- Rs.39,500 (25% of 2012-13 year end balance)
2015-16 Rs.4,50,000 Yes -No- Rs.55,000 (25% of 2013-14 year end balance)
2016-17 Rs.5,50,000 Yes -No- Rs.77,500 (25% of 2014-15 year end balance)
2017-18 Rs.6,80,000 -No- Yes Rs. 1,10,000 (Which is 50% of balance for the year preceding fourth year of withdrawal taking year and less than the preceding year i.e. 2016-17 yrs balance)

So, from above table you may have noticed that loan will be available from 3rd FY to 6th FY. That also 25% of the year end balance preceding 2 yrs of loan taking FY. Loan will have to be repaid within 36 months and interest is more than what you’re getting from PPF account. You will not get one more loan until you repay the existing loan. From 7th FY you are not eligible to take loan.

Withdrawal will be available from 7th FY onwards. Only one withdrawal is permissible. The amount of withdrawal will be lower of-immediately preceding 4th FY balance or immediately preceding FY balance.

Hope my effort given you the better picture of the topic what thought to share.