The Public Provident Fund (PPF) is a voluntary small savings scheme designed for salaried employees.
It has a lock-in period of 15 years during which an annual interest amount is earned.
This scheme provides numerous benefits, such as exemptions and tax benefits.
However, what are the available options once your PPF account matures?
Options PPF Account Holders Have After Maturity
According to the most recent PPF regulations, an account holder has three alternatives to choose from when their PPF account reaches maturity.
Closing PPF Account
Under the PPF scheme rules, an account holder has the option to close their PPF account after the 15-year maturity period.
They can withdraw all the accumulated funds, including the principal amount invested and the earned interest.
Continuing PPF Scheme Without New Deposits
PPF account holders have the option to continue their account even after maturity without making any additional deposits.
The account will continue to accrue interest at the same rate as before, and the account holder will not be required to make any new contributions.
Extending Your PPF Account With New Deposits
In addition to the first two options, an account holder also has the choice to extend the investment period of their PPF account beyond maturity with new deposits.
This extension period will be for 5 years, during which the funds will be locked in again.
An account holder with an extended account and deposits is permitted to make one withdrawal per fiscal year, subject to a maximum limit of 60% of the credit balance at the time of maturity within the block of 5 years.
Interest Rates on Small Savings Scheme
On March 31, the Modi government announced an increase in interest rates on most small savings schemes for the April-June quarter of FY24.
The interest rates for small savings schemes have been increased by up to 0.7%, or 70 basis points, with the highest hike being for NSC.
However, the PPF interest rate remains unchanged at 7.1%. If your PPF account is nearing maturity, you may be wondering what your next steps should be.
Here is all you need to know about your options.
