Saturday, March 2, 2019

Can NRIs Invest in Public Provident Fund or PPF?

Can NRI Invest in Public Provident Fund or PPF?
Answer to this question is both Yes and No. Since an NRI cannot open a new PPF account, so it's not possible for them to invest money in public provident fund, but if an NRI already has an active PPF account, opened when he was resident then he can continue to invest in PPF. Like other resident investor, he can invest up to Rs 1.5 lakh every financial year i.e. from 1st April to 31st March.

Earlier it was not allowed for an NRI to even invest in existing provident fund account but from 2003 onward, NRI can continue investment in their existing PPF account till maturity. This was very important steps taken by the government than because it's not possible to premature close a PPF account i.e. you cannot close PPF account before 15 years completes. Though you are allowed to withdraw some money from your provident fund account before maturity. Only in case of death of account holder, premature closure of PPF account is permitted in India.

  • Can NRIs Invest in Public Provident Fund in India?  
    No, NRIs are not allowed to open new provident fund account.

  • Can NRIs continue invest in PPF?
    Yes, if NRI already have a working provident fund account, he can continue his investment in PPF.

  • Can NRIs extend PPF tenure post maturity?
    No, NRIs are not allowed to extend PPF term after maturity. Only residents can extend it for 5 more years. 

What happens to PPF accounts after Maturity?

If you are not an NRI(Non Resident Indian) when your PPF accounts matures then you will have option to increase its tenure for another 5 years, but if you are NRI at that time, then you cannot extend its tenure, but you can remit the maturity amount to the country where you are staying. If you leave your provident fund account unattended then it will be considered as "extended without contribution" and will not fetch any further interest. Also while maturity amount and interest earned on PPF is free from income tax and wealth tax, you may need to pay tax in your country of residence if you decide to remit money abroad.

Can NRIs Continue to Invest in PPF?

Yes, if you already have an active Public Provident Fund account, opened when you were resident, you can continue to invest in PPF. You can invest until PPF matures. Residents are further allowed to extend PPF tenure for another 5 years but NRIs are not allowed to further extend PPF tenure. If you leave your money dormant, it would not fetch any interest and will be considered as "extended without contribution".

Does NRIs are allowed to invest in PPF

In short, NRI cannot invest in PPF if they don't have an existing account as NRIs are not allowed to open new PPF account, but if you do have an existing PPF account then you can continue your contribution i.e. you can invest up-to 1.5 lakh INR per year. Many IT professionals who work abroad (friends working in InfoSys, TCS, Wipro and CTS), but has Indian salary keep their investment in PPF alive.

Post maturity, depending upon whether you are an NRI or resident at that time, you can decide what to do with your PPF account and maturity amount. If you are a resident you can extend it for another 5 years but if you are an NRI its better to take the maturity amount and either invest in NRE fixed deposit or remit to the country you are staying currently.


  1. Can a resident open PPF account an joint account with an NRI (Mother and Son)

  2. I opened PPF account in the month of July 2013 and moved abroad in oct 2013 and status was NRI for FY 2013-14, can I continue depositing to my PPF account ? because though I opened it when I was in India but unknowlgly I became NRI for that FY onwards.

  3. if you fail 180 days test then you'll not be considered as NRI for that FY.

  4. I forgot to mention that i was out of India for two months before october 2014 also, so my status was NRI for FY 2013-14