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Can I Withdraw From PPF Without Penalty?

Last updated on: February 15, 2024 13:18 IST
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Do you have financial planning queries?
You can ask rediffGURU Colonel Sanjeev Govila (retd) your questions HERE.

Colonel Sanjeev Govila (retd) is the founder of Hum Fauji Initiatives (external link), a financial planning company dedicated to armed forces officers and their families. He has over 12 years of experience in financial planning and is a SEBI certified registered investment advisor; he is also accredited with AMFI and IRDA.

Illustrations: Dominic Xavier/

Arun: Hello sir, I am a 32 yr old with 50 k per month salary. How can I get 6 lakhs per month when I am 60 yrs.

To be able to get Rs 6 Lakhs per month implies 72 Lakhs a year. Assuming a withdrawal rate of 5% from the corpus that you need to build up to get that return, you need a corpus of about 14 Crores.

To build that kind of a corpus, you need to invest approx. Rs 53k from now onwards per month in an instrument like equity which gets you about 12% annualised returns.

Obviously you cannot spare that much right now. So start with whatever you can now and aim to increase the monthly amount regularly at least once a year as time passes.

Ritesh: Hi, How is pension calculated under EPS95. If an employee has changed 4 organzations during his career, will pension be calculated for 4 companies separately and then added up or it will be based on the last basic drawn multiplied by the overall service history within the UAN? Thanks

If you have maintained the same EPF account and have been shifting it as you moved companies, you will get it from one single source account. Even if different accounts have got created, you can merge them by following EPFO procedure and get a single pension.

Prakash: Hello I have to start investment please suggest some good plan and good returns

I have no idea about your risk profile, the amount you wish to invest and your future financial goals as also your age. Following could be some useful guidelines for you:

  • Emergency Fund: Set aside 3-6 months of living expenses in a high-yield savings account or liquid fund.
  • Debt Repayment: Pay off any high-interest debt to reduce financial liabilities.

Diversified Investment Portfolio:

1. Equity Investments: Invest in a mix of large-cap, mid-cap, and small-cap equity mutual funds or ETFs.

2. Debt Investments: Consider debt mutual funds, government bonds, corporate bonds, or fixed deposits for stable returns.

3. Gold Investment: Gold is considered a traditional safe-haven asset and a hedge against inflation and economic uncertainty.You can invest in gold exchange-traded funds (ETFs), gold mutual funds, SGBs.

4. Retirement Planning: Allocate funds to retirement-specific instruments like EPF, PPF, NPS, or retirement-focused mutual funds.

Professional Advice: Consult with a financial planner or advisor to create a customised investment plan aligned with your financial goals and risk tolerance.

Regularly review and adjust your investment portfolio to stay on track with your financial objectives and adapt to changing market conditions.

Surander: Sir I have opened PPF account in 1998 and thereafter continuous depositing the money. As on 01.04.2022 (After25 Years) my corpus was 8.5 Lacs and did not know the time frame of extension and deposited 1.5 lacs April-23. Suddenly i come to know that my account now has been extended till March 2028. Now i need money becz of extreme emergency. Please guide the penalty clause of 1% reduction will be from 01.04.2023 (Date of extension) or since the date of opening the account. Its premature closure but after 25 Years but before 30 years.

You will be allowed to withdraw 60% of the balance at the beginning of extended period (block of five years).

It means, let us say the account matured on 1st April 2023 and the available balance is Rs.8.5 Lakhs. Then, you are allowed to withdraw 60% of this Rs.8.5 Lakhs during the block period of 5 years. This can be withdrawn either in a single withdrawal or in instalment each year. However, only one withdrawal is allowed in a financial year.

Shanmukh: Hello sir, I previously worked in an organization as an intern where both PF and EPS accounts were opened, however no eps contribution was made. While joining my current organization I submitted Form 11. Now the current employer is contributing into my eps (here my basic+ DA > 15000). Do I need to get anything changed?

As your current employer is making the required contributions to your EPS account and all the required details are also fetched through the recent employer, you do not need to get anything changed in your EPS account.

  • You can ask rediffGURU Colonel Sanjeev Govila (retd) your questions HERE.

Disclaimer: This article is meant for information purposes only. This article and information do not constitute a distribution, an endorsement, an investment advice, an offer to buy or sell or the solicitation of an offer to buy or sell any securities/schemes or any other financial products/investment products mentioned in this QnA or an attempt to influence the opinion or behaviour of the investors/recipients.

Any use of the information/any investment and investment related decisions of the investors/recipients are at their sole discretion and risk. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Opinions expressed herein are subject to change without notice.

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