Can NRIs Continue To Invest In Existing PPF Account?

For a person who recently moved out of India and had a public provident fund (PPF) account as an Indian citizen, the account will remain active even after becoming an NRI.  

One can continue investing up to Rs 1.5 lakh in the account every financial year until maturity. If Income Tax returns are being filed in India, the account holder can claim deduction under section 80C for PPF deposit.  

However, a non-resident Indian cannot open a PPF account, as an NRI status disqualifies an individual from opening, operating and managing these accounts. 

Read More: What Happens To PPF When You Become An NRI?

NRIs who owned a PPF account as a resident Indian could invest in the fund earlier through an NRO. Further, they were given the same rate of interest that a resident Indian received. 

Since PPF is a debt-oriented asset class, people’s investment is not exposed to equities. Therefore, returns are not linked to the performance of the stock market. The government sets the interest rate on PPF returns every quarter based on the yield or return of government securities. 

Read More: Investments By NRIs and NRGs in Ahmedabad Realty Fall By 25 to 30%

One of the most popular long-term saving-cum-investment products, the PPF account or Public Provident Fund scheme, was first offered to the public in 1968 by the Finance Ministry’s National Savings Institute. The popularity is mainly due to its combination of safety, returns and tax savings. 

Investors usually use the PPF to build a corpus for their retirement. It allows them to put aside sums of money regularly over long periods of time. 

One can open a PPF account with either a Post Office or any nationalised bank, like the State Bank of India or Punjab National Bank or any other bank. 

As per rules, the PPF account balance can be fully withdrawn only upon maturity. After maturity, the account holder can withdraw the amount standing to the credit of an account holder in the PPF account along with the accrued interest. Subsequently, one can close the account. 

However, if an account holder requires funds and wishes to withdraw before maturity, that is before 15 years, and partial withdrawals can be made under the scheme from year seven, that is, upon completing six years. 

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