What happens to your PPF when you die, and how your family claims it

PPF is one of the cleanest tools in the Indian saver's kit: 7.1% a year (the rate for October to December 2026; the government reviews it every quarter), tax-free interest, EEE status and a sovereign guarantee. It is also easy to make messy for your heirs if you don't plan. Here's what happens when a PPF account holder dies, what your family has to do, and the decisions you can make now that save them weeks of work.

What if a PPF account holder dies before maturity? The account is closed; the nominee or legal heir can't continue it. Because it is closed on death, the premature-closure conditions don't apply, so the whole balance is paid out at once to the nominee, or to the legal heirs if there is no nominee, on a Form 11 claim at the bank branch or post office that holds the account. Interest is paid up to the end of the month before the month in which the money is paid. The rules and forms are explained below.

The first rule: the 15-year lock-in does not apply on death. A PPF account normally matures 15 years from the end of the financial year in which it was opened. If the holder dies before that, the nominee or legal heir can claim the whole balance in one payment; no waiting period applies. Interest keeps running until the end of the month before the month in which the money is paid out, not just until the date of death (paragraph 14 of the PPF Scheme 2019).

The second rule: the account cannot be continued by the nominee or legal heir. Unlike PPF maturity-time extension (where the holder can extend in 5-year blocks), there is no continuation on death. The balance is paid out. If your spouse already has their own PPF account, they can deposit a portion into their own (within the annual ₹1.5 lakh limit), but they cannot 'take over' yours. The account is closed.

Nominee vs legal heir, same trap as elsewhere. A PPF nominee receives the money in trust for the legal heirs. If you nominated your brother and your will leaves everything to your daughter, the brother receives the funds and is legally bound to hand them to the daughter. In practice families don't litigate this often because PPF balances aren't usually large enough to justify a court case, but if you have a large PPF balance and a contested will, you have a real problem. The fix: align your PPF nominee with the heir named in your will, and tell both your nominee and your heirs who gets what.

The claim form: Form 11. Under the Government Savings Promotion General Rules 2018, a nominee or legal heir claims a deceased holder's PPF with Form 11 at the bank branch or post office that holds the account, along with the death certificate, the passbook and their own KYC. With a nominee on record, settlement is usually quick. Without one, the heirs also file an affidavit (Form 13), letters of disclaimer from the other heirs (Form 14) and an indemnity bond (Form 15). The older Forms G and H belonged to the 1968 scheme and are no longer used.

No nominee: up to ₹5 lakh without court papers. If there is no nomination and no probate, succession certificate or legal-heir certificate is produced within six months of the death, the bank or post office can pay up to ₹5 lakh to the rightful heirs on Form 11 with the affidavit, disclaimer and indemnity forms. Above ₹5 lakh, the heirs need probate, letters of administration, a succession certificate, or a legal-heir certificate from the Tahsildar, and if the heirs disagree, only a court's succession certificate will do. That alone is a reason to nominate.

Three decisions to make right now. (1) Nominate, if you haven't, at your bank or post office; there is no fee to add or change a nomination. (2) Update your nominee after any major life event: marriage, a child, divorce, a death in the family. (3) Tell your nominee, by name, that they are the PPF nominee, what the account number is and at which branch, so they can act in the first week, not the third month. Sort My Legacy's Financial Inventory lets you record the PPF account, the nominee and the branch in one place, and your family sees it when they get access.

One more note: the tax-free status survives death. What your family receives is tax-free in their hands, because PPF is exempt at investment, while it grows and on withdrawal. It is not added to their income. They should still show it as exempt income in their tax return for that year to keep the paper trail clean.

General information, not legal, tax or financial advice. Laws and rules change, so check with a qualified lawyer or CA before you act.