Know how to extend the duration of your PPF account beyond the 15-year term
Find out how to extend the term of your PPF account beyond the 15-year term
New Delhi: The Public Provident Fund or PPF is one of the most sought-after long-term investment programs in the country due to its tax advantages and guaranteed returns. Most salaried people opt for the PPF because it is easy to maintain, with marginal monthly contributions to the plan. It should be mentioned that it belongs to the Exempt-Exempt-Exempt (EEE) category and is not applicable for a tax deduction.
One option for the account holder is to withdraw the entire amount, including interest, and close the account on maturity. But if you want to get the most out of the PPF, it is best to extend it until you retire.
Extend the PPF account by five years without further contribution
This option allows you to extend the maturity of your account by 5 years. That is, the corpus will continue to generate interest. And you don’t have to re-contribute during that extended five-year period. But what if you need the money for those five years? You can withdraw any amount as a partial cashout during the five-year period.
The only catch is that you can only make one withdrawal per exercise.
If you do not inform the bank or the post office of your preference after 15 years, the default option becomes applicable to your PPF account.
Extend the PPF account by five years with contributions:
This option is similar to the previous one in the sense that it extends the maturity of the PPF account by five years. The only difference is that you now have to make new contributions every year. How? The minimum is Rs 500 per year, which is not much to be honest. Moreover, you must inform the bank (or La Poste) of this choice because in the absence of warning from you, it will be treated as an extension of the PPF without contribution and any deposit that you will make on the account during of this five-year period will earn you no interest.