Public Provident Fund (PPF) is one of the most reliable long-term savings schemes, offering both security and tax benefits. Even after completing the 15-year maturity period, your PPF account continues to grow without the need for new investments. Here’s how you can make the most out of your PPF savings.
Key Features of PPF: A Safe and Tax-Free Investment
PPF accounts allow individuals to invest between Rs. 500 and Rs. 1.5 lakh annually, and they currently offer an interest rate of 7.1%. Beyond just a steady return, PPF provides benefits at every stage of investment:
- Investment Exemption: Contributions to PPF are eligible for tax deduction under Section 80C.
- Interest Earnings Exemption: The interest earned on the balance is completely tax-free.
- Maturity Benefits: When your PPF account matures, the full amount—principal plus interest—is tax-exempt.
Interest Earnings After Maturity
If your PPF account completes 15 years and you decide not to withdraw the balance, your savings will continue to earn interest at the prevailing PPF rate. The good news? You don’t need to reinvest or deposit new funds to keep earning.
This feature makes PPF an excellent long-term savings plan, offering you the freedom to withdraw when needed. You can choose to:
- Withdraw the full amount at once.
- Withdraw a portion and leave the rest to continue earning interest.
Extend Your PPF Account for More Growth
PPF also offers the option to extend your account beyond the initial 15-year period in blocks of five years. There’s no limit to how many times you can extend it. If you plan to continue contributing during the extended period, you’ll need to submit an application to your bank or post office.
How to Extend Your PPF Account
To extend the account, you must apply within one year of the maturity date. Fill out the extension form and submit it at the branch where you originally opened your account. This allows you to keep contributing and enjoy tax-free interest on your savings for another five years.
Maximizing PPF for Long-Term Goals
Investing in PPF can help you build a substantial corpus over time. With tax benefits at every stage—investment, interest, and maturity—PPF remains a top choice for people looking for secure, long-term savings.
Moreover, the option to earn interest beyond maturity and the flexibility to withdraw funds as needed make PPF a practical and reliable financial tool. Extend your account strategically, and you can enjoy uninterrupted growth for decades.
