Can my PPF account continue to earn tax-free returns after maturity?

My Public Provident Fund (PPF) account matured on March 31, 2022. I couldn't extend it. How long will it continue to earn tax-free interest? I do not need the money immediately? Can I restore the same account with fresh deposits? - SC Kapoor

The good news, Mr Kapoor, is that you'll keep earning tax-free interest until you close the PPF account.

In fact, your PPF corpus will continue to earn tax-free interest until the end of the month before you decide to close the account. So, if you close your account in March 2026, you'll earn interest until the end of February 2026.

Things to consider

While there are perks of not closing your PPF account, Mr Kapoor won't be able to make any fresh deposits.

The matured PPF accounts that have been lying idle for over a year cannot accept fresh investments. This means if Mr Kapoor wants to make a fresh deposit, he'd have to close the current account and start afresh for another 15 years.

But what if you, dear reader, want the flexibility of making fresh deposits after the maturity of the PPF account? In that case, do remember to extend your account within a year of its maturity. At that point, you'll be able to extend the account for a block of five years by choosing either of the two options: a) with deposit and b) without fresh deposit.

Also read: What every bank deposit and PPF investor must know

This article was originally published on March 18, 2024.