PPF after 15 years: what actually changes

PPF’s 15-year lock-in doesn’t close the account; it opens up a choice about what happens next. Three genuinely different paths are available, and they don’t just differ in whether the balance keeps growing; the rules for getting money back out differ sharply between them too.

Three paths once the lock-in ends

The first option is the simplest: close the account and withdraw the entire balance, tax-free under PPF’s “EEE” status. The balance stops growing at 7.1% the moment you do this: there’s no partial-close option, it’s all or nothing.

The second is extending the account without further contributions: you make no more deposits, but the existing balance keeps earning the full 7.1% every year, exactly as it did during the lock-in. The third is extending withcontributions: you keep depositing under the same ₹500–₹1,50,000 annual limits that applied before, and the balance keeps growing from both new money and interest. Either extension commits you to a fixed 5-year block, not an open-ended choice. At the end of that block, you choose again from the same three paths.

What each path is actually worth, five years on

Starting from a balance of ₹40,68,209 (what 15 years of maxing out the ₹1,50,000 annual limit at 7.1% actually reaches), here’s what a further 5-year block does under each path.

Extending costs nothing extra to consider: even without depositing another rupee, leaving the money in beats withdrawing it by a wide margin, purely because 7.1% tax-free compounding is hard to beat with cash sitting in a savings account instead.

The withdrawal rules differ just as much as the growth

The faster-growing path is also the more restrictive one. Extend with contributions, and you can withdraw at most 60% of the balance at the start of that 5-year block (in this example, 60% of ₹40,68,209, or ₹24,40,926), and only once during the entire block, regardless of how much the balance has grown since — the same kind of withdrawal-cap mechanics that apply before the 15-year mark too, just with a higher ceiling.

Extend without contributions, and that restriction disappears: you can withdraw any amount, once a year, with no percentage cap tied to the opening balance. It’s the more flexible option for access to a large sum, even though it grows more slowly than continuing to contribute.

Which path fits depends on what the next 5 years actually need to look like: closing out suits an immediate, known use for the full amount; extending without contributions suits wanting the money to keep growing tax-free while still being able to pull out a large sum if needed; extending with contributions suits treating PPF as an ongoing savings habit, accepting a tighter withdrawal cap in exchange for the fastest growth of the three.