Has your Public Provident Fund (PPF) account completed 15 years? Many people think they must withdraw all their money once the account matures. However, that’s not the only option.
Even after maturity, you can continue earning the government-backed 7.1% annual interest without taking extra risk. Here are the three main options available after your PPF account matures.
Option 1: Withdraw the Full Amount and Close the Account
If you need money for a major expense like buying a house, paying for higher education, or a wedding, you can close your PPF account and withdraw the entire balance.
The full maturity amount, including interest, is completely tax-free because PPF comes under the Exempt-Exempt-Exempt (EEE) tax category.
Option 2: Keep the Account Active Without New Deposits
If you don’t need the money right away, you can keep your PPF account active without making any fresh investments.
Your existing balance will continue to earn the current government-declared interest rate of 7.1% per year. You can also withdraw money once every financial year whenever required.
Option 3: Extend the Account for 5 Years With Fresh Investment
If you want to continue building your savings, you can extend your PPF account in blocks of five years.
To continue making fresh deposits, you must submit the required extension form (Form H/Form 4, as applicable) within one year from the date of maturity.
You can continue investing up to ₹1.5 lakh every year, claim tax benefits under Section 80C, and earn interest on your balance.
Don’t Miss This Important Rule
Many investors make a mistake while extending their PPF account.
If you choose extension with contribution within one year of maturity, you can continue making fresh deposits during the next five-year block.
However, if you let the one-year deadline pass without choosing this option, your account will be treated as extended without contribution.
In that case, you can keep earning interest on your existing balance, but you won’t be allowed to make fresh deposits during that extension period.
Which Option Should You Choose?
If you don’t urgently need the money for a major expense such as a home purchase or a medical emergency, continuing your PPF account can be a smart decision.
Before closing the account, review your overall investment portfolio, including EPF, NPS, and mutual funds.
PPF remains one of the safest and most tax-efficient long-term savings options, even after the initial 15-year maturity period.
