When and how much can one withdraw from PPF ?
One withdrawal, once a year, is allowed from 7th year onwards. You can withdraw an amount not exceeding the lower of:
a) 50% of the balance at the end of the 4th immediately preceding year
b) 50% of the balance at the end of the immediately preceding year
Example: If the account was opened in 2005-06, and first withdrawal can be made during 2011-12. . The amount of withdrawal will be the lower of:
a) 50% of the balance as on March 31, 2008.
b). 50% of the balance as on March 31, 2011.
Facility of Loan:
In case of emergency situations before the 7th year, you can take loans from your PPF account. You can take loans between 3rd and 6th year of opening the PPF account.
The maximum loan amount available will be equal to 25% of the balance at the end of the 2nd immediately preceding year.
Example: In your example, if loan is sought in 2010-11, the maximum amount of loan available would be 25% of the balance as on March 31, 2009.
The rate of interest:
On the loan is usually 2% over and above the rate of interest you receive in the PPF account. This loan has to be repaid within a period of 24 months. Once you repay a loan, another loan can be taken as long as you are within the 3rd and the 6th year of opening the account.
Source:jagoinvestor.com
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