The Public Provident Fund (PPF) is a popular long-term investment in India, offering tax-free returns and guaranteed growth. However, Non-Resident Indians (NRIs) are not allowed to open a new PPF account. If you already have one before becoming an NRI, there are specific rules regarding its continuation, maturity, and withdrawal.

This guide will help NRIs understand:
✅ Whether they can continue or extend an existing PPF
✅ Rules on withdrawal and repatriation
✅ Alternatives to PPF for NRIs

1. Can NRIs Invest in PPF?

🚫 NRIs cannot open a new PPF account.
✅ If an Indian resident opens a PPF account before becoming an NRI, they can continue it until maturity (15 years).

🔹 PPF is only available to Indian residents. Once a resident moves abroad and attains NRI status, they cannot start a new account.

2. What Happens to an Existing PPF Account After Becoming an NRI?

If you opened a PPF account before becoming an NRI, you can:

1️⃣ Continue Contributing 🏦

• You can continue depositing funds into the account until it matures (15 years).
• Deposits must be made from an NRE/NRO account.
• The interest earned remains tax-free in India.

2️⃣ No Extension Allowed After Maturity 🚫

• After the 15-year maturity, NRIs cannot extend the account for another block of 5 years (unlike resident Indians).
• The account must be closed and withdrawn after maturity.

3️⃣ Taxation in the Resident Country 🏛️

• While PPF interest is tax-free in India, it may be taxable in your resident country based on local tax laws.

3. How Can NRIs Withdraw PPF After Maturity?

🔹 NRIs can withdraw the entire PPF balance after the 15-year maturity.
🔹 The withdrawal amount can be credited to an NRO account.
🔹 Repatriation Rules:
✅ If withdrawn funds are in an NRO account, they can be repatriated up to $1 million per financial year under RBI’s Liberalized Remittance Scheme (LRS).
✅ If PPF maturity proceeds are from an NRE account contribution, they can be freely repatriated.

4. Should NRIs Keep Their PPF Account Active?

🔹 Pros of Keeping PPF Until Maturity
✔ Safe & Guaranteed Returns (Current Interest Rate: 7.1% p.a.)
✔ Tax-Free Interest in India
✔ No TDS Deduction on Withdrawals

🔹 Cons of Keeping PPF Active
❌ Funds are locked for 15 years (except in special cases like medical emergencies or higher education)
❌ Cannot Extend Beyond Maturity
❌ Taxable in Some Foreign Countries (e.g., USA under global income rules)

Best Option? If you are close to maturity, keeping your PPF account active can be beneficial. However, if you have many years left, exploring better investment options for NRIs is advisable.

5. Alternatives to PPF for NRIs

Since NRIs cannot open new PPF accounts, here are some alternative investment options:

A) NRE Fixed Deposits (FDS) 🏦

✔ High interest rates (5.5%–7.5% p.a.)
✔ Tax-free in India
✔ Freely repatriable

🔹 Best for NRIs looking for stable returns without tax liability in India.

B) ULIPs (Unit Linked Insurance Plans) for NRIs 📈

✔ Combination of investment + life insurance
✔ Tax-free maturity under Section 10(10D)
✔ Long-term wealth creation

🔹 Best for NRIs wanting both investment growth & insurance benefits.

C) Mutual Funds (NRE/NRO Investment Allowed) 💰

✔ Equity Mutual Funds for long-term growth
✔ Debt Mutual Funds for stable returns
✔ Can invest via NRE/NRO accounts

🔹 Best for NRIs looking for better returns than PPF.

D) Sovereign Gold Bonds (SGBs) 🏅

✔ Issued by RBI, backed by Govt. of India
✔ Fixed interest + Gold price appreciation
✔ Tax-free if held till maturity (8 years)

🔹 Best for NRIs who want to invest in gold with tax benefits.

6. FAQs on PPF for NRIs

1. Can NRIs open a new PPF account?

❌ No, NRIs cannot open a new PPF account.

2. Can NRIs continue contributing to an existing PPF account?

✅ Yes, but only until maturity.

3. Can NRIs extend PPF beyond 15 years?

❌ No, extension after maturity is not allowed for NRIs.

4. Is PPF interest taxable for NRIs?

✅ Not taxable in India, but may be taxable in countries like the US, UK, etc.

5. Can NRIs repatriate PPF maturity proceeds?

✅ Yes, but only through an NRO account (up to $1 million per year under LRS).

7. Final Thoughts: What Should NRIs Do with Their PPF?

✔ If your PPF is close to maturity, keep it for safe, tax-free returns.
✔ If you have many years left, consider withdrawing and reinvesting in better NRI-friendly options like NRE FDs, Mutual Funds, or SGBs.
✔ Since NRIs cannot extend PPF beyond 15 years, plan your investment accordingly.

🚀 PPF is great for Indian residents, but NRIs should explore better investment alternatives!