6 Things NRIs Should Know About Their PPF Account In India

Before you declare your NRI status, there are certain things that require your attention like your PPF account. What is a PPF account? PPF or The Public Provident Fund was introduced by the Ministry of Finance in India in the year 1968. Many include this scheme as part of their retirement planning. It is a tax-free savings scheme which can be availed by any Indian resident. However, an NRI cannot open a fresh PPF account. But PPF account opened before a person became an NRI can be maintained. Below are the 6 things NRIs should know about holding a PPF account in India:

NRIs Should Know About Their PPF

Opening new PPF account

NRIs cannot open a fresh PPF account in India. If you wish to open a PPF account, do it before you declare your NRI status or before you go onsite.

Maintaining existing PPF account

Though NRIs cannot open a fresh PPF account, they can maintain the PPF account they opened before they became an NRI. They need not close their existing account. From 2003, NRIs are allowed to make contributions towards their PPF account.

Interest rate for NRIs

Both Indian residents and NRIs get the same interest rate. There is no separate interest rate for Non-Resident Indians. Currently, the interest on PPF account is 8.1% per annum.

Maturity of PPF account

Generally, PPF account has a lock-in period of 15 years. After 15 years, the account holder can submit a request and extend the PPF account maturity for another 5 years. However, this facility is not extended to NRIs. Non-Resident Indians cannot extend the maturity date on PPF account after completing 15 years. If an NRI PPF account holder does not withdraw the amount after the maturity date, the account will be marked as non-contributable PPF account and the account holder will not be allowed to deposit money into it.

Tax exemption

There is no difference in the tax benefits received by an Indian resident and an NRI. Taxes are exempted for both parties. The income made in PPF account is also tax-free.

Excellent savings scheme

NRIs can use PPF account to plan their retired life. If they contribute a decent amount every year, they will get a lump sum amount while retiring or upon the maturity of the PPF account. If you are planning to settle abroad, invest in a PPF account before you take your flight.

Public Provident Fund is one of the best financial product available to Indian residents to make some savings for future expenses. To plan your financial life better, open a PPF account today.


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