Maturity

Investments

Maturity is the date when an investment's principal and final interest are repaid. For FDs, bonds, PPF, NSC, and insurance policies, maturity represents the end of the investment term when you receive the full value.

In detail

Maturity vs premature withdrawal:nFD: premature withdrawal allowed (penalty 0.5-1% deducted from applicable rate)nPPF: maturity at 15 years, extendable in 5-year blocksnNSC: 5-year maturity, no premature withdrawalnNPS: maturity at 60 years (partial exit allowed from age 60)nBonds: principal repaid at face value on maturity datennReinvestment at maturity: key decision. FD maturity: compare current rates across banks before auto-renewing. Bond maturity: redeploy based on current goals.

Formula

FD maturity value = P x (1 + r/4)^(4 x t)nPPF maturity (15 years, Rs 1.5L/year at 7.1%) = approximately Rs 40.68L

Real-life example

🇮🇳 India example

Suresh has Rs 5L FD maturing in June. Bank auto-renews at the same 1-year rate 6.8%. Before auto-renewal, he checks: AU Small Finance Bank offers 7.75% for 1 year. He cancels auto-renewal and moves to AU Bank, earning Rs 4,750 more over the year.

Frequently asked questions

What happens to my PPF after 15-year maturity? ▼

Four options: (1) Close and withdraw full amount tax-free, (2) Extend for 5 years without new deposits (continues to earn interest), (3) Extend for 5 years with deposits (continue 80C benefits), (4) Keep as-is and withdraw in parts. Most advisors recommend extending with contributions until retirement.