PPF Maturity Rules: The PPF is one of the country’s most popular long-term savings schemes. A key feature of this scheme is that it offers fully tax-free benefits under the EEE (Exempt-Exempt-Exempt) category. If you invest in a PPF account for 15 years, you must decide what to do with the funds upon maturity.
Account holders have three options after the 15-year term ends: withdraw the entire amount, extend the account without making further contributions, or extend the account while continuing contributions. Let us explore these options in detail.
When to Withdraw Funds
As a first option, if your account has matured, you can close it and transfer the accumulated corpus—along with the accrued interest—to your bank account. The money received upon closure is entirely tax-free. However, if you don’t need the funds immediately, experts advise against closing the account, as the benefits of compound interest are substantial.
In that case, you can extend your PPF account in blocks of five years. There is no limit on how many times you can extend the account; you can continue extending it in five-year periods throughout your lifetime.
Benefits of Extending the Account
If you decide to extend the account, you have two paths available. The first is extending the account without making new contributions. You do not need to fill out any forms at the bank or post office; the account automatically extends for five years after the initial 15-year term ends. During this extended period, you continue to earn interest at the government-mandated rate and can make withdrawals—of any amount you choose—once per financial year.
Rules Regarding Extension
The second option involves extending the account while continuing to make new contributions. If you continue to make deposits annually, you must fill out and submit Form H to your bank or post office within one year of maturity. If you make deposits without submitting Form H, you will neither earn interest on the new deposits nor receive any tax benefits. Please note that after opting for the new extension, you can withdraw 60% of the accumulated amount within a five-year period; make this choice based on your financial needs.