Your PPF account can be extended. Know the withdrawal rules.

Please explain the PPF withdrawal rules when it is extended for five years two or three times. - Arunachalam Venkatraman

A Public Provident Fund (PPF) account matures after 15 years, at which point you can either close it or extend it in five-year blocks, with or without contributions. There is no limit to the number of such extensions, allowing you to continue your PPF for 20, 25, 30 years, and beyond.

Extensions without any contributions

If you extend your PPF account after the initial 15-year maturity or any subsequent five-year blocks without making further contributions, your balance will continue to earn interest. However, you are allowed only one withdrawal per year, with no limit on the amount. That means you can withdraw the entire balance at once, if desired.

Do note that if you leave your PPF account open without making deposits for over a year after maturity, you will no longer be allowed to make any further contributions in the following years.

Extension by making contributions

During any five-year extension period of your PPF account, you can continue making deposits, but you must inform the bank or post office in advance.

Under this option, your withdrawal amount is limited to 60 per cent of the balance at the start of the extension. For example, if you have Rs 70 lakh at the time of extending your PPF account, you can withdraw a maximum of Rs 42 lakh over the next five years.

Additionally, you can withdraw just once a year. Which means you can either withdraw Rs 42 lakh in one go or in instalments over the next five years.

The last thing you need to remember is that you'll need to wait until the end of the five-year term to close the PPF account, as the remaining 40 per cent of the corpus is locked in. At the end of the term, you can either close the account or extend it further.

Also read:
Can an NRI continue PPF account?
NPS vs PPF vs EPF: The best retirement investment option

This article was originally published on September 18, 2024.