Moving abroad is exciting — new opportunities, new beginnings. But for many Indians, one question lingers long after the flight takes off: What happens to my PPF account now that I’m an NRI?
It gets even trickier when parents in India want to keep contributing to their child’s Public Provident Fund (PPF) account after the child moves overseas. Can they still do it? Will it break any rules? Let’s break this down in simple terms.
Can NRIs Keep Their PPF Accounts Active?
Here’s the thing — once you become a non-resident Indian (NRI), you can’t open a new PPF account.
But if you already had one before leaving India, you can continue it till the end of the 15-year term (or any previous extension, if applicable).
So, if your daughter opened her PPF account in 2016 and moved to the UK in 2024, she can keep it running until maturity. She just can’t extend it beyond that period once it ends.
Even better news? You only need to deposit ₹500 per year to keep it active. That’s all it takes to prevent the account from becoming inactive.
What If Parents Want to Keep Depositing?
Parents often wish to help their children by contributing to their PPF accounts — and yes, they can.
However, there’s a small but important detail: it’s better to gift the amount to your child and let the deposit be made from her own account.
Here’s why:
- The child (now NRI) must have her savings account redesignated as an NRO account.
- Depositing through the child’s own account keeps the transaction compliant with FEMA (Foreign Exchange Management Act) rules.
- Parents won’t get additional tax deductions under Section 80C, since their own ₹1.5 lakh annual PPF contribution already covers that benefit.
This simple adjustment ensures compliance and peace of mind — no tax headaches, no rule violations.
What Happens at Maturity?
The funds in a PPF account are non-repatriable, meaning they can’t be freely transferred abroad. When the PPF matures, the proceeds will be credited to the NRO account of the account holder (your child).
From there, up to $10 lakh per financial year can be remitted abroad after paying applicable taxes, if any. So, even though the money stays in India initially, it can still be transferred legally and safely when needed.
Key Takeaway
Think of it this way — moving abroad doesn’t end your child’s financial connection to India. With a bit of planning, her PPF can continue growing safely and tax-free until maturity.
Just remember these golden rules:
- NRIs can maintain existing PPF accounts (no new ones).
- Keep the account active with ₹500 per year.
- Contributions must follow FEMA and tax rules — ideally through gifting and NRO accounts.
Handled correctly, a PPF remains one of the most stable, long-term savings options for Indian families — no matter where life takes them.
Frequently Asked Questions
1. Can NRIs open a new PPF account?
No. NRIs cannot open new PPF accounts after leaving India, but they can continue contributing to an existing account until maturity.
2. Can parents contribute to their NRI child’s PPF account?
Yes, parents can gift the contribution amount to the child, who can then deposit it via her NRO account without breaking FEMA rules.
3. What happens to the PPF maturity amount for NRIs?
The maturity proceeds are credited to the NRO account and are non-repatriable. Up to $10 lakh per year can be remitted abroad after tax compliance.