The Public Provident Fund (PPF) is a long-term savings scheme backed by the Government of India. It offers a secure way to grow wealth while enjoying tax benefits under the Exempt-Exempt-Exempt (EEE) category. A PPF account matures after 15 years, but that does not mean you have to withdraw the funds immediately. If you wish to continue growing your savings, the government allows you to extend your PPF account in blocks of five years. Understanding your options after maturity can help you make the most of this investment tool.
In this article, we will explore the three options available to extend your PPF account after maturity and how to choose the right one based on your financial goals.
Understanding PPF Maturity and Extension Options
When your PPF account matures after 15 years, you can choose one of the following three options:
- Close the Account and Withdraw the Funds
- Extend the Account Without Further Contributions
- Extend the Account with Additional Contributions
Each option has its advantages, and selecting the right one depends on your financial objectives and liquidity needs. Let’s explore them in detail.
Option 1: Close the Account and Withdraw the Funds
The simplest option upon maturity is to close your PPF account and withdraw the accumulated balance, including interest earned over 15 years. This is ideal for individuals who require funds for significant life events such as buying a house, funding a child’s education, or retirement.
How to Withdraw Your PPF Funds
- Visit your bank or post office where the PPF account is held.
- Submit a duly filled Form C (or Form 2, depending on the institution).
- Provide identity proof and passbook (if required).
- The funds will be credited to your linked bank account.
Pros:
✔ Provides immediate liquidity.
✔ No further lock-in period.
✔ The maturity amount is tax-free.
Cons:
✘ Stops the benefit of compound interest.
✘ Ends tax-free wealth accumulation.
If you do not need the funds immediately, it might be beneficial to explore the next two options to continue earning interest.
Option 2: Extend the Account Without Further Contributions
If you do not need additional tax savings but want your funds to continue earning interest, you can extend your PPF account for another five-year block without making additional contributions.
Key Features:
- The balance continues to earn interest at the prevailing PPF interest rate set by the government.
- No need to make further deposits.
- You can withdraw a partial amount each year, subject to limits.
Withdrawal Rules During Extension Without Contribution:
- You can withdraw once per financial year.
- The maximum withdrawal limit is the balance at the end of the previous financial year.
- No need to submit Form H (declaration for extension).
Pros:
✔ Continued tax-free interest earnings.
✔ Partial liquidity while keeping funds invested.
✔ No further deposit obligations.
Cons:
✘ No additional tax benefits under Section 80C.
✘ Withdrawals are limited to once per financial year.
This option is ideal for those who do not require regular investment deductions but want to keep their funds growing.
Option 3: Extend the Account with Additional Contributions
If you want to continue investing in PPF for tax benefits and long-term savings, you can extend the account while making new contributions. This allows you to keep earning interest and benefit from tax deductions under Section 80C of the Income Tax Act.
How to Extend Your PPF Account with Contributions
- Submit Form H within one year from the maturity date to extend the account with fresh contributions.
- Continue depositing between ₹500 and ₹1,50,000 per year.
- Enjoy tax benefits under Section 80C for the extended period.
Withdrawal Rules During Extension With Contributions:
- You can withdraw up to 60% of the balance at the start of the extension period.
- Withdrawals are allowed once per financial year.
Pros:
✔ Continued tax-free interest earnings.
✔ Eligible for Section 80C tax deductions.
✔ Allows disciplined, long-term saving.
Cons:
✘ Requires mandatory Form H submission before making deposits.
✘ Restricted withdrawal limits.
This option is ideal for individuals who want to maximise their retirement corpus or continue saving for future financial needs while enjoying tax benefits.
Choosing the Right Option for You
To determine the best option for extending your PPF account, consider the following:
- Need for Liquidity: If you need funds, withdrawing is the best choice.
- Long-Term Growth: If you don’t need the money immediately, extending the account allows your funds to grow tax-free.
- Tax Benefits: If you still require Section 80C deductions, extending with contributions is beneficial.
- Investment Diversification: If your investment portfolio includes other tax-saving instruments, you may choose to extend without contributions.
How to Extend Your PPF Account Instantly
Leading banks like ICICI Bank provide convenient online options to extend and manage your PPF account. You can follow these steps:
1️⃣ Login to your ICICI Bank NetBanking account.
2️⃣ Navigate to Bank Accounts → PPF Accounts.
3️⃣ Choose the extension option and submit the required details.
4️⃣ Upload Form H (if continuing with contributions).
5️⃣ Confirm and extend your account instantly.
By leveraging digital banking facilities, managing your PPF account has never been easier.
Final Thoughts
Extending your PPF account after maturity is a great way to continue enjoying tax-free interest earnings and growing your savings. Whether you choose to withdraw, extend without contributions, or extend with contributions depends on your financial goals and liquidity needs. By planning wisely and using online banking tools, you can make informed decisions to secure your financial future.
If you are unsure which option to choose, consider consulting a financial advisor or using a PPF calculator to assess the best approach based on your long-term savings goals.
With these three options at your disposal, extending your PPF account can be a strategic move towards wealth accumulation and financial security. Choose wisely and make the most of this government-backed investment scheme!
