Jagoinvestor

June 11, 2012

PPF Maturity rules for withdrawing your money

Do you know what are the rules on PPF maturity if you want to withdraw your money ? Do you know that you can extend your PPF account a block of 5 yrs after it’s initial maturity of 15 yrs? A lot of people think that once the PPF maturity is over, they get a licence to withdraw the money at any point of time in what ever way they want, in the case of extension of PPF. Today let me highlight some important points that you should be clear about PPF withdrawal rule in case of extension and show you how to calculate your PPF maturity amount. To start with lets answer what Kailash Chandra asked me sometime back on his PPF

I had opened PPF account on 05/05/1995 and extended for 5 years. Now the balance is Rs.651000/- as on 30/04/2012 and want to withdrawal partly. What amount can I draw please intimate. (link)

Whats the answer?

Its 60% Surprised!… lets move on

Before we move forward, let me clear that Public Provident Fund or PPF is a life time account. One can extend it for next 5 yrs for infinite times, this means you can keep on extending it for another 5 yrs after the maturity is over. That would in a way makes it look like a 5 yrs closed fixed deposit earning you applicable interest rate with tax benefits and without any taxation involved, even having a partial withdrawal benefit 🙂  That’s one reason why you want to open your PPF account right now even if you don’t need it at the moment, so that the maturity is 15 yrs away from now. See it as a milestone!

PPF Maturity Rules

1. PPF extended without any further contribution

The first situation is when you want to continue your PPF account, but do not want to put any further money in it . In this case all you want to do is just leave your PPF account as it is and let it earn the interest on the account accumulated. Note that if you dont take any action for 1 yr after your PPF matures, this option is default and automatically activates. Note that once its considered as “extended without any further contribution”, then later you cant put any further subscription in it. Now you can only withdraw from the PPF account, but cannot invest any fresh money in it. Note that in this case, you can withdraw any amount from your Public Provident Fund account, there is no limit. You can withdraw 10%, 50% or 90% as there is no limit. The balance amount will keep on earning the interest further. However you can withdraw only once a year, not more than once. (Learn how PPF account interest is calculated)

Interesting Fact : Now as you know this,  can you see an interesting point here, this way PPF can be acting as a great Pension tool, where you can withdraw the interest part yearly once and then utilize it for full year. For example if a PPF account has 1 crore into it, and lets say the interest is 8% (just an example). You can withdraw 5 lacs out of the Public Provident Fund account and the remaining 95 lacs will earn 8% interest, which will be 7.4 lacs. This 7.4 lacs will be added back to 95 lacs and the total next year would be 102.4 lacs. This way one can keep on withdrawing some amount from it and let it grow too.

2. PPF extended with further contribution

In another option, you can choose to invest in your PPF account on regular basis even after extension. But this has to be done within 1 yr of PPF maturity (before the completion of 16 yrs in PPF). Note that in this case, you can only withdraw maximum 60% of your PPF amount in total within the entire 5 yrs block. Each year you can withdraw maximum once.

For example if your Public Provident Fund balance at maturity is Rs 1 crore. Then you can withdraw a total of maximum 60 lacs in entire 5 yr block. You can withdraw 20 lacs in first year, then 10 lacs in 2nd year and then 30 lacs in 4th year. But Once 60% is consumed , you cant touch any money further for the current block. Only when the 5 yrs are completed and new block of 5 yrs start, then your balance will be 40 lacs and then again the same rule applies. However note that at the start of a new 5 yr block, you can choose whether to continue the regular contribution or stop the contribution, like we discussed in point 1.

Important : If at the time of Public Provident Fund maturity , you will have the potential to invest more in your PPF account in coming years, then better invest more and more and only when its time to retire or when you cant contribute more, extend the PPF with “no further subscription” option.

Bank Officials have no idea about PPF Maturity Rules in detail

A lot of banks (SBI) and Post office officials have no idea about PPF rules in such a detail. They will tell you that it can be extended only 2 times and hence insist on closing your PPF account once 2 extensions happen after your PPF maturity. Tell them that you know what are the rules and also teach them.

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Ramachandran nair
Ramachandran nair
7 years ago

Very informative and helps the investor to save his hard earned money. But, as far as I know, renewal can be done after 15 years only once. If I am wrong please correct me.

skb
skb
7 years ago

Excellent writeup on post maturity withdrawal and investment in PPF account. Thanks!

Gopal Kamath
Gopal Kamath
7 years ago

I have a PPF account, extended three times, I want to know if I extend and every year can I with draw 5 to 10 % and keep extending by depositing amount in PPF.
Pl give me a very specific answer, As I a confused over 60% withdrawal in block of 5 years or get it extended with out contribution

Raj
Raj
7 years ago

Hey Manish,

Can i withdraw 100% at the end of 15 years, incase i do not want to extend to 5 years?

Thanks,
Raj

Dddddd
Dddddd
7 years ago

I withdrew 60% from ppf today but realised I don’t need it for the next three months
Can I put it back in Monday as tomorrow being bank holiday

AnanthaRamu
AnanthaRamu
7 years ago

I opened PPF account on 18th August 2001 in post Office, I approached them on maturity, They claim that it matures for the financial year & I can withdraw only after March 2017.

bhagwan
7 years ago

Respected Sir, My father expired , he has got PPF investment and given two names of nominees, My mother and mine . so can i get his money direct in my mother account , The account will be matured in march 2018. pls advise

Shivanshu
Shivanshu
Reply to  bhagwan
7 years ago

Sorry for your loss. In case of death of ppf owner you are allowed to redeem anytime after the death. So you need not require to wait for 15yrs or maturity date.

Priya
Priya
7 years ago

Hey Manish,

My father’s 15 year PPF account matured last year in Apr 2015. We forgot to extend the account within one year of maturity. I wanted to know, if its possible to extend the account now. Or do you have any other suggestions in this case? I don’t want to withdraw the money and open a new PPF since we are looking for short term deposit, might want to withdraw after a year or so.
Please reply when you get time.

Thanks,
Priya

satyanarayana
satyanarayana
7 years ago

HI Manish,

I have an doubt, let say I contribute 30k/year to my ppf and 20k/year to my spouse’s ppf. now could I show 50k/year as tax savings for my tax deduction.

Saransh
Saransh
7 years ago

Hi,
My mother’s PPF account matured in 2015 , then she extended and invested in it again.
But now, she wants to withdraw some amount.
How much can she withdraw ?

Puneesh
Puneesh
7 years ago

Hi Manish,
I have been viewing your threaded responses to PPF related issues. I have a query – my father’s PPF account term expires in 2017. He is a pensioner and had opened this account 25 years ago. He would now like to withdraw the complete amount on maturity and wants to know that although this withdrawal including interest is tax free, will it be clubbed with his income for the year and taxed accordingly? Thanks in advance. Pineesh Tandon

Siddharth
Siddharth
7 years ago

Hey team,

Just got employed and planning for a 15 year maturity ppf account. Just saw a ppf intrest calculator where i computed the total amount after 15 years.

So my question is after 15 years , the closing balance is 17 lakh and the withdrawal available is 5.1 lakh. what is this difference? Surely it wont be 5 lakh as im planning to invest 60k per year for 15 years.

Please guide

Prabha
Prabha
7 years ago

I am a senior citizen. I have extended PPF account two times. It is maturing in the year 2020. if I want to close and withdraw the full amount in the year 2018 itself, what will be repercussions?

amit
amit
7 years ago

Hi, can i withdraw full amount after maturity 15 years.

Manoj
Manoj
7 years ago

Dear Manish,

Great article. I opened my PPF account with the first deposit being December 96 i.e. FY9697. I extended the PPF account in 2011 by 5 years, so it should have matured in March 2016, being 20 financial years. However after sitting on my application for withdrawal for 2 months, my post office fellows are saying it will mature in March 2017, not now. Is this the correct? Thanks in advance for replying

Prakash
Prakash
7 years ago

Hi, I have a query:
1) A PPF account matured on 1st Apr 2015. The account was closed on 16th Mar 2016. The bank says that since the closure request is in the middle of the month interest is calculated only upto previous month, i.e. Feb 2016. So I loose interest for 15 days.

Is this correct ?

2) It is noticed that interest is calculated not by the number of days but number of months. So, in a leap year I loose interest for 1 day (extra day in February).

Is this correct ? Why should investor loose interest of 1 day (of 29 February)

Sachin
Sachin
7 years ago

How is the 60% withdrawal calculated. Does it include the amount invested during the 5 years extension or only 60% of amount invested upto the 15 years tenure? Say for example amount accrued upto 15 years was Rs. 10 Lacs and during the extension Rs. 2 lacs additional invested. So Rs. 6 Lacs can be withdrawn or Rs. 7.20 Lacs?

na
na
7 years ago

can i open ppf account for my US born child but indian origin parents???

vishal
vishal
7 years ago

My PPF account completed 15 years 3 years ago and i Have been making regular contribution every year even now. But I have not submitted any form for extension. What implication will it have and what should I do now?

Epchi
Epchi
7 years ago

My PPF account was opened in Jan 2016 .due to some circumstances i could not continue these PPF Account.i want to close and withdraw amount my condition is not good
my total amout in paid 49,000.

please guide..

please do the needfull..