Reader Subrata writes-in:

My Public Provident Fund (PPF) account shall complete the original term of 15-years plus an extended term of 05-years in February, 2012. But I’d like to withdraw the balance only in September, 2013 to coincide with my retirement. Will my PPF account continue to earn interest in the interim period from February, 2012 to September, 2013? Please revert with actual clause numbers, etc. from the PPF Act.

My first response was to ask Subrata to check with the bank where he has his PPF account. To this, Subrata wrote back:

No one has so far given me a concrete answer. The bank staff who handle provident fund accounts don’t know even the basic rules pertaining to PPF. If one asks them a question other than the routine ones, their eyes look like those on a dead fish. I do remember reading somewhere that interest is given for the interim period but I’m not sure.

I then actually looked at some of my previous articles on the Public Provident Fund. The answer was right there in one of the comments. I wrote back to Subrata:

I think I have some good news. Here is a link to the PPF Act, 1968. On Page 3 it says (emphasis mine):

(3) Closure of account or continuation of account without deposits after maturity:- Notwithstanding the provisions of sub-paragraph (1), any time after the expiry of 15-years from the end of the year in which the initial subscription was made by him, a subscriber may, if he so desires, apply in Form C or as ‘near thereto as possible’ together with his pass book to the Accounts Office for the withdrawal of the entire balance standing to his credit and the Accounts Office, on receipt of such an application from the subscriber, shall subject to the provisions of sub-paragraph (4) allow the withdrawal of the entire balance (together with interest up to the last day of the month preceding the month in which the application for withdrawals made) after making adjustments, if any, in respect of any interest due from the subscriber on loans taken by him and close his account.

So, you will get the interest till the time you withdraw.

A happy reader who I’m sure will now give the bank staff an earful and a copy of the Public Provident Fund Act!