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Public Provident Fund (PPF) Account – Benefits, Features & Interest Rates
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A detailed guide on Public Provident Fund (PPF) Account in India

The Public Provident Fund (PPF) needs no introduction in India. It is popular as a savings cum tax saving instrument in India. PPF was introduced by the Ministry of Finance in 1968 with the aim to mobilise small savings by providing an investment tool with reasonable returns in combination with Income Tax benefits. Let’s dig deeper into the PPF to understand its features, benefits, and more.

What is a PPF Account?

PPF or Public Provident Fund Scheme is a long-term investment option that offers an attractive rate of interest and returns against the amount invested. The returns and interest earned are not taxable under the norms of the Income Tax. 

How can a person open a PPF account?

An individual can open a PPF account either at a Post Office or nationalised bank or designated private bank. To open he or she needs to submit the duly filled application form along with the required documents.

What is the interest rate on PPF?

The Ministry sets the interest rates every year and as per the Finance Ministry circular, PPF currently offers an interest rate of 7.1%. However, PPF Calculator can be used to figure out the returns which you can expect on investing a specific amount in a PPF account. 

8 Essential Features of Public Provident Fund (PPF) Account

  • Tenure: The PPF comes with a minimum tenure of 15 years, which one can extend in blocks of 5 years as per their wish.
  • Investment Limits: The minimum amount required to invest in a PPF account is Rs 500 and a maximum of Rs 1.5 lakh in every financial year. One can invest in lump sum or maximum in 12 installments.
  • Opening Balance: The account can be opened with just Rs 100. Annual investments of more than Rs 1.5 lakh will not earn any interest and also will not be eligible for tax savings.
  • Deposit Frequency: One has to deposit their desired amount at least once every year for 15 years.
  • Mode of deposit: The amount can be deposited into a PPF account either by cash, cheque, demand draft, or via online fund transfer.
  • Nomination: A PPF account holder can opt for a nominee at the time of opening the account or subsequently.
  • Joint account: Opening a PPF account in joint names is not allowed. The account can be held only in the name of a single person.
  • Risk factor: Since PPF is backed by the Indian government, it’s a risk-free product, offering guaranteed returns along with complete capital protection. 


Who is eligible to invest in Public Provident Fund (PPF)?

Any Indian Citizen can open a PPF account either in his own name or on behalf of a minor. However, an individual can have only one account in his name. 

PPF Withdrawal

An account holder can fully withdraw all the money from his PPF account (along with the accrued interest) upon completion of 15 years. Partial withdrawals can be made from the fifth year onwards (subject to conditions).

Tax Benefits on PPF Account

PPF allows income tax deductions upto Rs 1.5 lakh on the amount invested in the PPF account. It follows the EEE ( Exempt-Exempt-Exempt) model of taxation which implies that the interest earned and the maturity amount, both are exempted from taxes. 

How to close a PPF account?

Upon completion of full tenure of 15 years, one can withdraw the entire account balance and close the account. Withdrawal of upto 50% is allowed under special circumstances after the fifth year. 

How to transfer a PPF account?

To transfer a PPF account one needs to submit a duly filled new account opening application form along with the passbook of the old PPF account at the specific branch. The branch representative will process the application and forward it along with relevant documents to the new branch. Once this application is processed, the PPF account will be successfully transferred to the new branch.

How many PPF accounts can an individual open?

An individual is liable to open only one PPF account across the country either in a bank or Post Office.

How much money is allowed to be withdrawn from a PPF account?

One can withdraw money partially after completing five years from the date of opening the account. However, one can only withdraw up to 50% of the total balance in the account at the end of the fourth year from the opening date.

What is the minimum lock-in period for a PPF account?

The minimum lock-in period for a PPF account is 15 years.

How to revive an inactive account?

To revive a dormant PPF Account a written request needs to be submitted at the Bank Branch or Post Office where the account is based. A minimum amount of Rs 500 for each year needs to be paid in case of no contributions made along with the penalty of Rs 50 per inactive year. 

PPF is a useful and important financial product for tax saving as well as for parking your funds at a safe place. So, if you haven’t planned to open one, do it today for a secured future.

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