What Choices Are Available If A PPF Account Reaches Maturity After 15 Years?
April 7, 2023: Due to its numerous appealing characteristics and advantages, including improved returns and tax savings under income tax regulations, the public provident fund (PPF) is a popular and investor-friendly investment strategy. The National Savings Institute of the Finance Ministry introduced the PPF programme in 1968.
The interest rate on PPF is not fixed because it is based on the yield on 10-year government bonds. At the start of each quarter, the interest rate on PPF is set based on the average bond yield for the previous three months.
The PPF investment has a 15-year lock-in period starting on the day the account is opened. This lock-in period gradually gets shorter as time goes on. As a result, a PPF account that is opened in April 2023 will mature in March 2038.
As your PPF account reaches maturity, you can either withdraw the full corpus or leave the money in the account by extending the term for however long you feel is reasonable, but only in increments of five years.
And imagine that after 15 years, when your PPF account is due to mature, you do not withdraw your funds, in which case the account will automatically be extended. Your PPF corpus will continue to earn interest at the government-set rate for extensions.
What choices are available when a PPF account reaches maturity?
Cancel the account and take out the entire balance:
When your PPF account reaches maturity, your first choice is to close the account and take the entire profit.
Extend the account term without making a new deposit: Your second choice is to keep your account open and prolong the term in a block of 5 years once it reaches maturity without making a new deposit.
Extend the PPF term with new deposits: If your PPF account has reached maturity, your third option is to prolong the term with new deposits. Again, a block of five years might be added to the term.
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