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Personal Finance News

Public Provident Fund: Are NRIs required to close their PPF accounts before 15 years now?

rajeev kumar
By Rajeev Kumar

4 min read | Updated on July 25, 2025, 06:57 IST

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SUMMARY

PPF account closure rules for NRIs: Non-residents are not allowed to open a new PPF account. However, those who invested in this scheme while they were still resident Indians can continue to hold till maturity.

PPF rule for NRIs

One can close the PPF account prematurely after the change in his/her residency status. Representational image source: Shutterstock

Question by Lalit Sedani: Is there a change in the Public Provident Fund (PPF) account rules for NRIs recently? My daughter, when she was in India, opened a PPF account about 10 years back. Now, she is an NRI from 2022, and till last year, she was contributing to the PPF account. This PPF account will mature after 4 years, after completing 15 years. Is there a change in the rule that says an NRI has to close the PPF account even though 15 years have not been completed?
Answer: No, there has been no change in rules recently to make it mandatory for non-resident Indians (NRIs) to close their PPF accounts. However, a small change in a rule related to PPF account extension by NRIs was announced in 2024. You can decide whether your daughter should close her PPF account or continue till maturity based on the following rules:

  1. NRIs are not allowed to open a new account under the PPF scheme. However, those who invested in this scheme while they were still resident Indians can continue to hold their PPF accounts till maturity. They can contribute to their PPF accounts and earn interest. But there are some conditions (mentioned below).

  2. One should inform the bank or the post office about the change of residency status. In case a person continues to contribute to the PPF account without proper notification of a change in his/her residency status, then such an account may earn a lower interest rate applicable to the Post Office Savings Account, which is 4% currently. Failure to inform may lead to further complications at the time of maturity.

  3. A person can continue to contribute to PPF till maturity after becoming an NRI on a non-repatriation basis. In other words, the amount withdrawn on maturity from such accounts cannot be repatriated to the country of his/her current residence. The funds withdrawn from the PPF account will be credited to the NRO account of the NRI.

  4. The PPF account of resident-turned-NRIs cannot be extended after maturity, i.e., after 15 years.

  5. One can close the PPF account prematurely after the change in his/her residency status. However, the premature closure is allowed after five years from the end of the year in which the account was opened. At the time of premature closure, 1% interest can be deducted from the date of account opening.

PPF rules for NRIs: Summary table

Rule / ConditionDetails
Opening new PPF accountNRIs cannot open new PPF accounts.
Existing PPF accountsNRIs who opened PPF accounts while being resident Indians can continue till maturity.
Notification requirementNRIs must inform the bank/post office about change in residency status.
Interest rate riskIf residency change is not informed, interest may drop to 4% (POSA rate).
Contribution basisContributions allowed on a non-repatriation basis.
Withdrawal rulesMaturity proceeds credited to NRO account; cannot be repatriated.
Extension after maturityNRIs cannot extend PPF accounts beyond 15 years.
Premature closureAllowed after 5 years from end of account opening year; 1% interest penalty applies.
2024 rule changeExtended PPF accounts (where Form H didn’t ask for residency status) will earn 4% interest till Sep 30, 2024, and 0% thereafter.

What changed in 2024?

Resident-turned-NRIs are not allowed to extend their PPF accounts after 15 years. However, in the past, some NRIs may have extended their PPF accounts when the Form H didn't specifically ask for the residency status. In 2024, the Finance Ministry clarified the rule for such irregular PPF accounts.

The ministry said such extended PPF accounts may earn POSA interest only till September 30, 2024, and zero interest thereafter.

"For only those active NRI's PPF accounts opened under the Public Provident Fund Scheme (PPF), 1968, where Form H did not specifically ask the residency status of the account holder, POSA rate of interest shall be given to the account holder (Indian citizen who became NRI during the currency of Account) till 30th September 2024. Thereafter, the said account shall earn zero percent rate of interest," the Department of Economic Affairs under the Ministry of Finance said in an order dated July 12, 2024.

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About The Author

rajeev kumar
Rajeev Kumar is a Deputy Editor at Upstox, and covers personal finance stories. In over 11 years as a journalist, he has written over 2,000 articles on topics like income tax, mutual funds, credit cards, insurance, investing, savings, and pension. He has previously worked with organisations like 1% Club, The Financial Express, Zee Business and Hindustan Times.

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