Year 15. The PPF statement shows a fat tax-free corpus — and a decision most holders never planned for: extend in 5-year blocks, withdraw partially, or close and redeploy? The default (do nothing) lets the account go dormant-sluggish while better options compound elsewhere. This guide covers the 15-year math at 7.1%, extension rules, partial-withdrawal windows and the continue-vs-close framework.
Part of the India wealth & tax guide. Compare 15y vs 20y in the PPF calculator; contrast taxable growth in FD calculator.
15 years at 7.1%: ₹1.5L yearly becomes what
₹1.5 lakh yearly at 7.1% for 15 years matures near ₹40.7L on ₹22.5L invested — interest alone ~₹18.2L, all tax-free under EEE. The yearly ceiling (₹1.5L) and floor (₹500) shape strategy: max it early every April to capture full-year compounding (deposits before April 5 earn the whole year's interest — the single highest-ROI calendar habit in Indian saving). Miss years and the account needs revival formalities; automate standing instructions instead.
Extend, withdraw or close: the three doors
| Option | Mechanics | Choose when |
|---|---|---|
| Extend (5-year blocks) | With or without fresh deposits; interest continues tax-free | Rate stays competitive; no better post-tax use |
| Partial withdraw | From year 7 within prescribed limits | Goals (education, margin money) without full exit |
| Close + redeploy | Full maturity, reinvest elsewhere | Horizon shortened or superior post-tax return found |
Extension with deposits suits ongoing 80C needs; extension without deposits suits a pure compounding tail. Partial withdrawals after year 7 fund goals while the core keeps compounding — the feature most holders discover a decade late.
EEE framing vs FD/RD reality
PPF's EEE (exempt-exempt-exempt: deposit deduction, tax-free interest, tax-free maturity) routinely beats higher-headline FD rates post-tax for salaried investors in upper slabs — a 7.1% tax-free return equals ~10%+ pre-tax FD interest at 30% slab. The price is liquidity: 15-year lock-in with limited windows vs FDs you can break (with penalty). Framework: emergency + sub-3-year goals → FD/RD; 15-year tax-free core → PPF to the ₹1.5L ceiling; surplus horizon money → equity SIP (see SIP math). Rate revisions come most Aprils — recheck the 7.1% assumption yearly, not decadally.
Informational purposes only — not financial advice. PPF rules and rates revise; verify current scheme notifications. See /terms.