Is your PPF account going to mature after depositing money for 15 consecutive years? What you should do? What are the options after PPF mature? Which option is right for you? What is the Letter Format to extend PPF account? You should start thinking about it from now on. Let’s try to find the answers to these questions –
PPF Account Extension Options
Public Provident Fund (PPF) account has a lock in period of 15 years. You can either avail loan against PPF account or make partial withdrawals during its tenure. But what to do after it matures.
If your PPF account is matured, then you have three options:
- Close the account and withdraw entire amount
- Extend the account without fresh contribution
- Extend the account with fresh contribution
Close Account, Withdraw Entire Amount
A PPF account can be closed after expiry of 15 years from the end of the year in which initial subscription was made into the account. PPF has no relation to maturity since the opening day. For example, if you opened a PPF account on 18 May 2002, it will mature on 1 April 2018. To close the PPF account, one has to intimate to the institution (where the PPF account was opened), and the entire balance in the account will be paid.
Extend the Account without Fresh Contribution
After maturing a PPF account, you can also extend the account without any fresh contribution in it. You will have to inform your bank or post office to extend the account. If you do not give information to the account office, then it will be considered as extended on its own. You must keep in mind that you cannot invest in it.
You will continue to get interest from the account for the next five years. You will get a chance to make one withdrawal in each financial year of any amount within the balance. Once the account is extended without deposit, the customer cannot deposit the amount in the PPF deposit account for five years.
Extend the Account with Contribution
Third option, if you choose to extend the account with a new contribution to the PPF account, then you have to fill in Form H at the bank or post office. If you keep depositing funds in the account for more than one year without filling Form 15H, then your new investment will be considered irregular. You will not get any interest on this.
Apart from this, you will not get any benefit under Section 80C of the Income Tax Act by depositing money in this account. Therefore, the application is necessary for continuing the account.
How to Make Partial withdrawal in the extended period
If you have opted to extend the account without contribution, then you can withdraw funds from this account every financial year. After this, you will continue to get interest on the remaining amount in the account.
If you have applied to extend it with contribution to PPF account, then you can only make partial withdrawal from this account. For this, you have to fill Form C, subject to the condition that your total withdrawal in a five-year block should not exceed 60 percent of the balance at the credit at the commencement of the extended period.
PPF Account Extension Letter Format (FORM-H)
To extend PPF account beyond 15 years, you must apply through a letter form-H, which you can download online from the institution website or get it physically at branch office.
Here in the download link of application format for continuance of account beyond 15 years of SBI.
If you have opened the PPF account with Post Office, Download application format / letter format (FORM-H) for continuance of account under PPF beyond 15 years.
Which is the right option – What you should do?
If the maturity of your PPF account is not close to your retirement then it is better to extend it further. If you have opened a PPF account at the age of 30, then by advancing it thrice you will reach 60.
The best way is to fill Form H and keep the account active by making a minimum contribution of 500 rupees. However, when PPF account matures, you should decide according to your need.