Recently one of my reader has asked me ” Should I Close my PPF account or go for Partial withdrawal?” Well, I would answer this question in simpler way saying that, it will completely depend up on what is your need of money.
But if you really want to know which is best among PPF Premature Closure Vs PPF Partial Withdrawal, then one have to understand this by comparing both the ways. There are certain benefits of continuing PPF account without closing before maturity. Let’s discuss them one by one.
Confused – PPF Account Closure or PPF Partial Withdrawal??
Let’s discuss few rules for PPF account Closure first and accordingly we will discuss about the partial Withdrawal.
- You will get the entire PPF balance when your close the PPF account permanently.
- In this case, you have to bear the PPF penalty rule introduced recently. Your PPF account will recalculate the maturity value with a 1% less interest rate from the date of account opening.
- You can’t contribute further. PPF is one of the best tool to create long term wealth and also get maturity value tax free. So, you will lose the benefit of PPF account.
- Only you can close the account in case the account holder is dead, any life threatening Medical and Higher Education.
- You have to complete the min PPF account age of 5 years in this case.
Now, if you withdraw PPF balance partially here are the things applied with your PPF account.
- You have to complete 6 years to get eligible for PPF partial withdrawal.
- You can withdraw 50% of your PPF balance. In case this will full fill your requirement, then you have saved huge money by not opting for a personal loan.
- You can continue your PPF account till as many year as you can. Here you are making sure that your wealth will grow further and income will be tax free always.
- Even if you withdraw partially, there will be no PPF penalty rules applied. That means no loss on interest amount.
- After completion of 6 years, you can go for PPF partial withdrawal for any reason without bothering about any special case.
So, I would say don’t close your PPF account until and unless you have no other way to arrange the money. I hope you will also agree with my thoughts. If not then you can share your views & reasons by writing a simple comment below. Thanks for reading.