Robust Benefits Await You Once PPF Matures After 15 Years – Find Out Options

Public Provident Fund (PPF) is a government-backed long-term savings scheme designed to create a robust retirement corpus. Its 15-year lock-in period nurtures a disciplined saving habit, the principal amount and interest are fully backed by the Government of India, and a fixed interest rate and tax-free returns ensure enough money for a safe retired life. However, the corpus is not necessarily meant for withdrawing when a PPF account matures after 15 years.

There are other options, including extending the scheme without any new deposits and earning tax-free interest and resuming the contributions. Each of these options have different rules.

Understanding these rules will help the retirees decide which option they need to select so that they can reap maximum benefits.

Three Choices at Maturity: Withdraw, Pause, or Extend
When the 15-year period ends, savers have three clear paths. The first is to close the account entirely and take out the full amount. This requires submitting a closure form along with the PPF passbook. Once processed, the entire balance is paid out, and the account is permanently closed.

The second option is to keep the account going without making any new deposits. In this case, the money already in the account continues to earn interest at the current PPF rate. However, the account holder can only take out money once per a financial year. This route suits those who want to let their savings grow without adding more funds while still having limited access to the money.

The third route is to extend the account in blocks of five years and continue making contributions. This extension can be repeated as many times as desired. But there's a catch: the account holder must submit Form 4-also known as Form H-within one year of the account's maturity. If this form is not submitted in time, the account is automatically extended, but no new deposits will be allowed. The balance will still earn interest, but the saver loses the chance to add more money.

Tax-Free at Every Stage: The EEE Advantage
One of the biggest attractions of the PPF is it is tax-free. The financial experts acknowledge that the investment, interest and the corpus are -tax free. According to the old tax regime, annual investments of up to Rs. 1.5 lakh are eligible for deduction under Section 80C of the Income Tax Act. Moreover, the interest earned and the withdrawal amount at maturity will have no tax.

Current Interest Rate and How It's Calculated
The government has made the PPF interest rate for the financial year 2025-26 at 7.1 per cent per annum. This interest is compounding once a year and credited to the account on March 31.
The way interest is calculated is also important. Each month, the interest is calculated on the lowest balance amount between the 5th and the last day of the month. So, experts call for depositing money before the 5th of the month to reap maximum benefits.

Loan Facility: Borrowing from Savings
The PPF scheme also allows the beneficiaries to take loans against their balance. However, there are some conditions, such as the maximum loan amount is limited to 25 per cent of the balance available at the end of the second year preceding the year of application. The borrower can only be eligible for a fresh loan if he repaid the existing loan in full. The interest a borrower liable to pay is 1 percent if the loan is cleared within 36 months and the interest will increase to 6 percent if the period extends beyond that.

Partial Withdrawals: When You Can Take Out Some Money
PPF allows partial withdrawals only after 5 financial years from the end of the year when the account started. The withdrawal has been capped at a maximum of 50 per cent of the eligible balance.
That means the balance at the end of the fourth year before the withdrawal year and the balance at the end of the previous financial year. The lower of these two is used to determine the 50 per cent limit.

Opening a PPF Account Online
A person can open a PPF account online after completing the steps hassle-free, including logging into a bank's internet or mobile banking platform and selecting 'Self Account' or 'Minor Account' for children under the PPF account option.
Then the beneficiary needs to fill in the personal details and nominee information. After entering the amount, one wishes to deposit for the year, he can submit the form. Entering a one-time password (OTP) received on the registered mobile number is important to complete the verification.
Once verified, the account number will be displayed on the screen, and a confirmation email with all the details will be sent to the beneficiaries registered email address.