Public Provident Fund (PPF) is one of the most popular long-term investment options in India, offering tax-free returns and government-backed security. But what happens when your PPF account matures after 15 years? The good news is that you don’t have to withdraw your money immediately. Instead, you have three options to continue earning returns and growing your wealth.
PPF Investors Can Continue Earning Post-Maturity
| Topic | Summary |
|---|---|
| PPF Maturity | PPF matures after 15 years but can be extended in 5-year blocks. |
| Option 1 | Withdraw full maturity amount (tax-free). |
| Option 2 | Extend PPF without fresh contributions (interest accrues). |
| Option 3 | Extend PPF with new contributions and tax benefits. |
| Interest Rate | ~7-8% (as per government notification). |
| Tax Benefits | Section 80C benefits apply if extended with deposits. |
| Official Source | National Savings Institute |
If your PPF is maturing soon, you have three options: withdraw fully, extend without deposits, or extend with fresh investments. Each choice has unique benefits, so choose based on your financial goals, tax planning, and liquidity needs.
For those who want continued tax-free growth, extending with fresh contributions is the best choice. If you don’t need the money now but want passive interest, simply extend without deposits. And if you need liquidity, withdraw your PPF corpus and reinvest elsewhere.
Understanding PPF Maturity and Its Implications
PPF accounts have a fixed tenure of 15 years, after which the investor has three primary options:
- Withdraw the full amount and close the account.
- Extend the account without making new deposits.
- Extend the account while continuing to invest.
Option 1: Withdraw the Entire PPF Maturity Amount
The simplest option is to close the account and withdraw the entire balance, which remains completely tax-free. This is ideal if you need liquidity for major expenses like buying property, funding education, or retirement planning.
Example
Suppose you invested ₹1.5 lakh per year for 15 years at an average 7.5% interest rate. Your maturity corpus would be approximately ₹40-45 lakh—a substantial tax-free sum that can be reinvested elsewhere.
Pros: Immediate access to your funds, No restrictions on reinvestment, Tax-free lump sum amount.
Cons: Stops earning interest post-withdrawal, might lose tax-free compounding benefits.
Option 2: Extend PPF Without Fresh Deposits
If you don’t need the money immediately, you can extend your PPF account in 5-year blocks without making further deposits. The balance continues to earn interest at the prevailing PPF rate, and you’re allowed to make one partial withdrawal per financial year.
Example
If you have ₹40 lakh in your PPF account, it will continue to grow at around 7.5% interest annually, adding ₹3 lakh per year in passive income without fresh investments.
Pros:
- Continues earning tax-free interest.
- Partial withdrawals allowed every year.
- No need to deposit further funds.
Cons:
- No new investments mean lower future corpus growth.
- Limited liquidity (one withdrawal per year).
Option 3: Extend PPF with Fresh Deposits
You can extend your PPF in 5-year blocks while continuing to contribute. This is a great option for investors who want to keep earning tax benefits under Section 80C and maintain compounding growth.
Important: To opt for this, you must submit Form H within one year of maturity to your bank or post office.
Example
If you extend and keep investing ₹1.5 lakh per year for another 5 years, your corpus will grow substantially, reaching over ₹60-70 lakh within 20 years.
Pros:
- Retains 80C tax deduction benefits.
- Keeps growing tax-free.
- High long-term returns.
Cons:
- Locked-in for 5-year blocks.
- Limited withdrawal flexibility.
How to Extend Your PPF Account?
- Decide if you want to extend with or without deposits.
- Submit Form H (only if continuing with deposits) at your PPF servicing bank/post office within one year of maturity.
- Continue earning interest and make withdrawals as per the extension option chosen.
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Comparison: Best PPF Post-Maturity Option for You
| Feature | Option 1: Withdraw | Option 2: Extend (No Deposits) | Option 3: Extend (With Deposits) |
| Interest Earnings | No | Yes | Yes |
| Fresh Deposits | No | No | Yes |
| Tax Benefits | No | Yes | Yes (80C) |
| Withdrawal Flexibility | Full amount | Partial | Partial |
| Ideal For | Liquidity needs | Passive tax-free growth | Long-term tax-free wealth creation |
Additional Investment Options After PPF Maturity
If you choose to withdraw your PPF maturity amount, consider reinvesting in:
- Fixed Deposits (FDs): Secure investment with stable returns.
- Mutual Funds (Equity or Debt): Higher potential returns for long-term wealth.
- Senior Citizens’ Saving Scheme (SCSS): Ideal for retirees seeking stable income.
- Sukanya Samriddhi Yojana (SSY): Best for those saving for a daughter’s future.
Frequently Asked Questions (FAQs)
1. What happens if I don’t extend my PPF account?
If you don’t withdraw or extend, your PPF account will continue to earn interest, but you won’t be able to make new deposits or withdrawals until you formally extend it.
2. Can I withdraw partially if I extend my PPF?
Yes, but only one withdrawal per financial year is allowed, subject to limits set by the government.
3. Will I still get tax benefits if I extend my PPF?
Yes, but only if you extend with fresh contributions by submitting Form H.
4. Is there a limit to how many times I can extend my PPF?
No, PPF can be extended indefinitely in 5-year blocks.
5. What is the current PPF interest rate?
PPF interest rates are revised quarterly by the government. As of recent updates, the rate is around 7.1%-7.5% per annum. Check the latest rates on the National Savings Institute website.
