Public Provident Fund (PPF) and Sukanya Samriddhi Yojana (SSY) accounts are popular long-term savings schemes in India, known for their attractive interest rates and tax benefits. However, account holders need to be aware of certain rules and regulations to ensure their accounts remain active and they continue to reap the benefits. One crucial aspect is what happens after the maturity of these accounts. Failing to take timely action can lead to your PPF or SSY account being frozen.

PPF Account Maturity: What You Need to Know

A PPF account matures 15 years from the end of the financial year in which it was opened. After maturity, you have a few options:

• Withdraw the Entire Amount: You can close the account and withdraw the entire balance, including the principal and accumulated interest. This entire corpus is tax-free. To do this, submit Form C along with your PPF passbook and KYC documents to the bank or post office where you hold the account.

• Extend the Account with Contributions: You can extend your PPF account for a block of 5 years and continue making fresh contributions. To do this, you must submit Form H to the bank or post office within one year of the original maturity date. Remember to deposit a minimum of ₹500 annually to keep the account active. If you fail to submit Form H, further contributions will not earn interest or qualify for tax benefits under Section 80C of the Income Tax Act, 1961.

• Extend the Account without Contributions: You can extend the PPF account for a block of 5 years without making any further deposits. The existing balance will continue to earn interest at the prevailing PPF rate. You can also make partial withdrawals, but only once a year and subject to certain balance restrictions.

If you take no action after your PPF account matures, it will be automatically extended for five years. However, you will not be able to make any fresh deposits.

Sukanya Samriddhi Yojana (SSY) Account Maturity: Key Considerations

The Sukanya Samriddhi Yojana account matures 21 years from the date of opening. Here's what you should keep in mind:

• Maturity and Interest: All deposits made into the SSY account for the initial 15 years will continue to earn interest until the account matures after 21 years. However, no interest is payable after the account completes 21 years from its opening date.
• Withdrawal at Maturity: Once the account matures, you can close it and withdraw the accumulated corpus.
• Premature Closure: Premature closure is permitted if the account holder gets married after attaining the age of 18. In such cases, the account can be closed one month before or three months after the date of marriage.
• No Extension: Unlike PPF accounts, there is no provision to extend the SSY account beyond its 21-year maturity period.

Consequences of Inactivity and How to Avoid Them

If you do not close your SSY account after maturity, the balance will continue to earn interest at the rate applicable to Post Office Savings Accounts until the account is closed. To prevent your PPF or SSY account from becoming inactive or frozen, make sure to:

• Keep Track of Maturity Dates: Mark the maturity dates of your PPF and SSY accounts and plan accordingly.
• Take Timely Action: Whether you want to withdraw the money, extend the PPF account, or close the SSY account, take the necessary steps before the deadline.
• Ensure Minimum Deposits: To avoid penalties or account freezing, deposit the minimum required amount in your PPF (₹500) or SSY (₹250) account each financial year.
• Update KYC: Ensure your Know Your Customer (KYC) documents are up to date with the bank or post office.
• Regularize Irregular Accounts: If your account has become irregular due to non-compliance with the rules, take steps to regularize it by paying the penalty and making the required deposits.

By staying informed and proactive, you can ensure that your PPF and SSY accounts continue to provide you with the intended benefits and help you achieve your long-term financial goals.