PPF Account: Public Provident Fund (PPF) is a small savings scheme with a lock-in period of 15 years, from the day of opening the account. In simple words, if you have have started investing in PPF in April 2023, it will mature in March 2038. But what can a PPF account holder do once their account matures?
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As per the PPF scheme rules, 2019, a PPF account holder will be left with 3 alternatives once the account matures:
(a) Take maturity payment by submitting account closure form along with passbook at concerned Post Office
(b) Retain maturity value in his/her account further without deposit, the PPF interest rate will be applicable and payment can be taken any time or can take 1 withdrawal in each FY.
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(c) Extend his/her account for further block of 5 years and so on (within one years of maturity) by submitting prescribed extension form at concerned Post Office.
Closing PPF account on maturity
An account holder, once their PPF account matures after 15 years, can choose to close the account and withdraw the investment. The PPF scheme rules 2019 mandate that the maturity date of PPF account is after 15 years from the end of the financial year in which initial subscription was made.
Retaining maturity value without any fresh deposit
The account holder can also choose to continue with their PPF account and not make any new deposits. The account can be continued for any period and it will continue to earn interest rate applicable to the scheme.
PPF account extension with fresh deposits
Other than the two options mentioned above, a PPF account holder can also extend their account with fresh investments. The account can be extended for a block of five years. In extended account with deposits, 1 withdrawal can be taken in each FY subject to maximum limit 60 per cent of balance credit at the time of maturity in the block of 5 years.
It is worth stating here that a discontinued PPF account cannot be extended.
Small Savings Schemes Interest Rates
The Modi government on March 31 announced an increase in the interest rates on most small saving schemes for FY24 April-June quarter. The interest rates for small savings schemes have been hiked up to 70 basis points or 0.7 per cent, with the maximum hike for NSC. The PPF interest rate has, however, been kept the same at 7.1 per cent.PPF Account: Public Provident Fund account maturity nearing? What’s next? All you need to know
