Public Provident Fund: What are options available once a PPF account matures after 15 years?

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Public provident fund (PPF) is an investor-friendly and popular investment scheme on account of its multiple attractive features and benefits in terms of better returns and tax savings under income tax laws. The PPF scheme was launched in 1968 by the Finance Ministry’s National Savings Institute.

As far as interest rate on PPF is concerned, the rate is not fixed as it is linked to the 10-year government bond yield. The interest rate on PPF is fixed at the beginning of a quarter based on the average bond yield in the previous three months.

Read More: Central Board Of Trustees To Soon Decide On PF Interest Rates For FY 2022-23

PPF has lock-in of 15 years

The PPF investment comes with a lock-in period of 15 years, from the day of opening the account. With each passing year, this lock-in period progressively comes down. So, if you open a PPF account in April 2023, it will mature in March 2038.

After your PPF account matures, you can withdraw the entire corpus or leave the amount by extending the term for as long as you feel feasible, but that can be extended in blocks of 5 years. And suppose, if you do not withdraw your money from your PPF account once it is matured after 15 years, the account will be extended by default. Your PPF corpus will continue to attract interest on extension as fixed by the government.

Read More: New PF Rules: Update For Non-PAN Users; Check TDS Rate On EPF Withdrawal

What are the options available after the maturity of a PPF account?Close the account and withdraw entire corpus:

The first option you have when your PPF account matures is that you can opt for closing the account and withdrawing the entire proceeds.

Extend the account term without fresh contribution:

The second option you have is that you do not close your account and extend the term in a block of 5 years after maturity without depositing any fresh money.

Extend the PPF term with fresh deposits:The third option for you with a matured PPF account is that you can extend the term with fresh deposits. Again the term can be extended for a block of 5 years.