PPF Account: What to do with your PPF account after 15 years? Know 3 smart options before withdrawing the money..

Public Provident Fund: A substantial corpus accumulates in the Public Provident Fund (PPF) after the completion of 15 years. The question then arises: what should be done with the money once the 15-year maturity period ends? Withdrawing the entire amount in a lump sum is not your only option; the rules offer several excellent alternatives.

Currently, PPF offers an annual interest rate of 7.1%, calculated on a compound annual basis. If your PPF account has matured, you can choose the option best suited to your financial goals from the following three choices:

1. Withdraw the entire amount and close the account

Fifteen years after the end of the financial year in which the account was opened, the account holder can apply to withdraw the full amount, including the principal and accumulated interest.

When should you choose this option? If you have a major expense—such as funding children's higher education or a wedding, purchasing a home, or repaying a large debt—then the time of maturity is ideal for withdrawing the funds.

Note that if you do not need the money immediately, withdrawing it simply because the account has completed 15 years may not be the best decision. Doing so would mean losing out on the benefits of this government scheme, which offers guaranteed, tax-free returns.

2. Leave the corpus invested without making fresh contributions

Many PPF account holders are unaware of this second option. Even if you do not wish to make further contributions, you can leave your accumulated funds in the PPF account. Your existing balance will continue to grow at the prevailing PPF interest rate (currently 7.1%). Under the rules, you are permitted to make one withdrawal from the account balance during each financial year.

For whom is this suitable? This is an excellent option for those who wish to earn interest while keeping their existing capital secure, without wanting to take on the risk or commitment of making fresh investments every year.

3. Extend the tenure in 5-year blocks with fresh investments

If you wish to continue saving in the PPF, you can extend the account in 5-year blocks and keep making new investments annually. The most important aspect here is timing: you must submit 'Form 4' at the bank or post office within one year of the maturity date.

Once the form is submitted, your account tenure will be extended by 5 years. You can continue investing within the prescribed annual PPF limits (minimum ₹500 to maximum ₹1.5 lakh).

Be careful not to make the mistake of depositing money directly into the account after the 15-year term ends without submitting Form 4. According to the rules, funds deposited without completing the required formalities within the stipulated timeframe will earn neither interest nor tax benefits.

What is the right decision for you?

PPF maturity does not imply a deadline to close the account; instead, it offers you greater freedom and flexibility in managing your funds.

Withdraw the entire amount if needed.
If you have only partial requirements, keep the account active without making fresh contributions and make a withdrawal once a year as needed.
If you desire tax-free, fixed returns, extend the account for 5 years by submitting Form 4 within one year of maturity.

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