The account has a 15-year lifespan that can be extended for an additional five years with or without contributions.
Although there are other investment options on the market, government schemes are still the first choice for many of us. The Public Provident Fund is an excellent choice if you are on the hunt for a long-term investing programme in the government. This programme allows for 15-year investments. You can benefit from tax advantages and a secure investment alternative with PPF. It was created by the government along the lines of the Provident Fund Scheme, in which anybody could invest, including employed people, homemakers, and kids. PPF scheme is a great investment option for entrepreneurs who want to accumulate retirement funds for the future.
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Although PPF investment periods are for 15 years, it does not mean you have to withdraw your money and close the PPF account. The account has a 15-year lifespan that can be extended for an additional five years with or without contributions. There is no cap on the number of extensions. The maturity of your PPF account can therefore be extended to 20 years, 25 years, 30 years, and so on. However, you won’t be allowed to make any additional deposits in the following years if you keep your PPF account open for more than a year after maturity without making any deposits.
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You should know that you may only withdraw money from your PPF account once per fiscal year if you choose to prolong it without making any additional deposits. For instance, your PPF account has Rs 20 lakh in it and has been active for 15 years. Then, you stopped making contributions, and after two years, it has grown to Rs. 24.56 lakh (generating 7.10% interest). Once per fiscal year, you may withdraw the total amount or certain portions of it.
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You must submit an application to the bank notifying them that your account has reached maturity before you can withdraw funds. You will also need to submit a completed application form, your original passbook, and a voided cheque. The money deposited in your PPF account will then be transferred to your savings account after all the bank information has been verified.
The annual interest rate for PPF accounts is currently 7.1 percent. PPF deposits are limited to Rs. 1.5 lakh per fiscal year with a minimum of Rs. 500. Only one PPF account can be opened in a person’s name.
