Navigate Financial Struggles – Learn About Partial Withdrawal from Your Savings in 2024
During financial emergencies, borrowing should be a last resort. It’s better to use personal savings before considering withdrawal from investments.
Instead of withdrawing entire investments, partial withdrawals are possible for certain investment types.
Emergency Cash Strategies
New Pension Scheme (NPS): After three investment years, NPS allows restricted partial withdrawals. This option is available for higher education, marriage, home purchase, medical treatment, disability, self-development, and start-ups.
Fixed Deposits (FDs): Depending on the FD type, banks permit partial redemption. Using sweep-in or flexi FD accounts calculates interest rates according to balance and period.
Unit-Linked Insurance Plans (ULIPs): ULIPs enable partial withdrawals after five policy years, subject to certain conditions.
Public Provident Fund (PPF): PPF allows partial withdrawal after seven years for specific reasons.
Employee Provident Fund (EPF): EPF offers partial withdrawal for various reasons, including home purchase, renovation, medical treatment, and education.
Senior Citizen Savings Scheme (SCSS): SCSS can be prematurely closed after a year, with charges varying based on withdrawal timing.
RBI Bonds: RBI Floating Rate Savings Bond permits partial withdrawal only for senior citizens.
Sovereign Gold Bonds: Sovereign Gold Bonds can be redeemed after five years, and trading is possible on exchanges.
Kisan Vikas Patra: Partial withdrawal from Kisan Vikas Patra is permitted after a lock-in period of 30 months.
Considerations Before Withdrawing
- Document proof is necessary for fund needs.
- Some investments, like EPF, can directly transfer funds to the intended destination.
- Withdrawal may result in missed growth potential of investments.
- Compare interest rates and growth potential before making a partial withdrawal.
Always evaluate your financial needs, compare withdrawal options, and understand potential growth implications before making partial withdrawals from investments.
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