PPF account holders ALERT! Tips to maximise your PPF balance after 15 years maturity | Turn your monthly investment of Rs 12,500 into over Rs 1.5 crore - PPF account interest rate, calculator

PPF account holders ALERT! Tips to maximise your PPF balance after 15 years maturity - Public Provident Fund (PPF) is one of the top investment destinations for people across ages in India. It's a preferred investment option for a salaried class employee and an individual running a business, mainly because of its EEE - Exempt Exempt Exempt category tax benefit.

Why is PPF the most preferred investment destination?

PPF is called the EEE investment scheme because there is tax exemption on investment, interest / return and maturity. It's a risk free investment scheme with promising returns due to its compounding power.

PPF scheme is backed by the central government and can be opened in a bank or in a post office.

PPF scheme comes with an initial lock-in period of 15 years. Suppose, if you start investing annually in PPF at the age of 30 years, the investment scheme will mature when you turn 45 years old.

With every passing day, the cost of living is increasing no matter in which part of the world you live in. So, the maturity amount that you will get at 45 years of age will be required much more when you turn 60. In addition, you might not have a regular income from your employer in case you retire. So, putting it simply, you will need the amount more when you turn 60 as compared to when you are 45.

Considering that you don't have any immediate plans to utilise the lump sum maturity amount which includes your Principal and interest amount, you may plan to reinvest the maturity amount.  

Tips to maximise your PPF balance after 15 years maturity

1) Extend for another 5 years without investing a penny

An individual can choose to extend the PPF account as many times as possible as there is no limit to it. The account is extended for a default option of 5-year term and can be renewed as many times as you wish every five years.

The best part of this is there is absolutely no need to invest or contribute money freshly. It means you can simply opt to stay away from investing in your PPF account for 5 years and it will still continue to generate huge funds owing to its compounding power at the interest rate applicable to the scheme.

This process also comes with an option that an investor can withdraw the money from his/her PPF account but that is permissible only once a year. The remaining balance will continue to generate interest. However, if you don't invest in your PPF account for over a year, you can't continue again with deposits for the remaining term.

2) Extend for another 5 years with contribution

One year before the maturity of your PPF account, you need to inform your bank branch about your extension plans of the scheme. This way you can continue to earn interest and Sec.80C tax benefit. Once this is proceeded with the bank, you are eligible to withdraw a maximum 60% of the balance in one block of five years.

3) Close PPF account and withdraw entire maturity amount and reinvest in another investment scheme

Once the mandated 15 years of PPF are completed, the investor can close his/her PPF account and choose to reinvest, if not needed urgently, in another investment scheme like Kisan Vikas Patra (KVP).

Also Read | Post office schemes, PPF interest rate, calculator: Your perfect guide for risk free investments

Public Provident Fund (PPF) calculator 

The interest rate on PPF is 7.1 per cent per annum.

Investment: Rs 1,50,000 per annum 

Time period: 30 years

Interest: 7.1%

Maturity value: Rs 1,54,50,911

Total interest: Rs 1,09,50,911

Invested amount: Rs 45,00,000

Also Read | Post Office Monthly Income Scheme: Tips to maxmise your returns in 5 years | MIS interest rate 2022, calculator