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Explore Three Choices After Your PPF Account Matures

Updated: Aug 1, 2023

A PPF account holder has three choices after the account reaches maturity.

The Public Provident Fund (PPF) has long been favored by Indian investors as a reliable retirement savings plan. With attractive benefits like tax deductions under Section 80C, tax-exempted maturity amounts, and tax-free interest, it's no wonder PPF is a popular choice.

One of the key features of PPF is its manageable minimum investment and the assurance of risk-free returns. Moreover, the lock-in period of 15 years offers a stable and secure investment option.

However, after the maturity period ends, some PPF account holders may be unaware of the available options. Here, we will explore the three choices you have at this particular point of time to help you make the best decision for your investment portfolio.

You've diligently saved in your PPF account for 15 years, and now it's time to decide what to do next. Financial experts recommend considering renewing your PPF account in blocks of five years if you don't require the money immediately.

To make things easier, you can use tools like a PPF calculator to estimate your PPF maturity amount accurately.

In this article, we'll guide you through all the essential details about extending or renewing your PPF account after it reaches maturity. Let's dive in and explore your options for the next phase of your PPF journey!

Three Choices After Your PPF Account Mature
Choices on PPF maturity

Three Choices After Your PPF Account Mature: What You Need to Know

When your PPF account reaches maturity, you have three choices to consider:

1. Close the Account and Make a Complete Withdrawal

Your PPF account matures after 15 financial years from the end of the year it was opened. For example, if you opened a PPF account in May 2007, the opening year is considered to be the last day of March 2008. So, the maturity date for this account would be April 1, 2023, precisely 15 years after its initial opening in 2008.

Withdrawals: When you wish to close your PPF account, simply inform the post office or bank where the account is held. They will credit the entire amount of the proceeds, including both the principal and the interest earned, to your linked bank account.

2. Extend the Account Without Adding New Funds

Once your PPF account matures, you have a choice - you can choose to keep your account open without adding any new funds. The money in the account will keep earning interest until you decide to close it. The best part is that you can extend the account in five-year increments indefinitely, giving you flexibility.

But here's an important point to remember: If you opt for this choice, you won't be able to make any additional contributions to your account, even if you want to.

Partial Withdrawals: During each financial year, you can make one withdrawal from your PPF account. The best part is that there are no restrictions on how you use this money. Even as you make partial withdrawals, the remaining balance in your account will keep earning interest. So, you can still benefit from your investment even if you decide to withdraw a part of it.

3. Add New Contributions For Expanding Your PPF Account

If your PPF account has reached maturity, you have an interesting option to consider

You can continue funding it with additional contributions. To do this, submit Form H to the post office or bank within a year of the maturity date.

However, it's important to note that if you don't submit Form H, any deposits made after maturity will be considered irregular. While you can still make deposits to the PPF account, they won't earn any interest and won't be eligible for tax deductions under ITA Section 80C.

Partial Withdrawals: If you choose to extend your PPF account with additional contributions, you are allowed only one partial withdrawal during the five-year extension period. The maximum withdrawal is limited to 60% of the account balance at the start of the extension period. You can withdraw this sum in a single installment or in several installments over five years.

As it reaches maturity, you might be wondering about the best course of action for your hard-earned savings. If you don't require immediate access to the funds, extending the PPF account could be a wise move. By doing so, your money will continue to grow and accumulate interest for another five years, providing you with greater financial security.

Three Choices After Your PPF Account Mature

When should you think about extending your PPF account?

If your retirement age is still a considerable distance away, this could be an ideal option for you. For instance, if you opened your PPF account at the age of 30, and it matures at 45, extending it up to three times will allow you to access the funds when you retire at 60.

The process of extending your PPF account is relatively straightforward. To continue contributing to the account, you'll need to submit Form H. This way, you can not only increase your corpus but also enjoy the added benefit of lower taxes.

Two methods for extending your PPF account after maturity:

1. Extending Without New Contributions:

If you wish to keep your PPF account open without making any additional contributions, there's no need for any action on your part. As long as you don't withdraw the money within a year of maturity, your account will automatically be extended for another five years.

2. Extending With Fresh Contributions:

On the other hand, if you prefer to continue investing in your PPF account, you can do so by submitting Form H within one year of its maturity. This simple step will allow you to add fresh funds and further grow your savings.

Remember, by extending your PPF account, your money will continue to work for you, accumulating interest and providing financial stability for your future needs.

In conclusion,

Whether you choose to extend your PPF account without new contributions or opt to continue investing fresh funds, you're making a wise decision to secure your financial future. Your PPF account's maturity need not mark the end of its benefits; it can continue to yield rewards for you even after 15 years of investing.

If managing financial matters, including PPF returns, ever becomes a challenge, consider seeking assistance from experts. So, take the step towards a more secure future and explore the possibilities of extending your PPF account.


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