The Public Provident Fund (PPF) scheme remains one of India’s most popular long-term investment options, offering a rare combination of capital safety, guaranteed returns and tax benefits. Backed by the government, it is widely used for retirement planning and wealth creation. Here’s everything you need to know about PPF, including interest rates, eligibility, tax benefits, withdrawal rules, loans and account-opening procedures.
What is PPF Scheme?
The Public Provident Fund (PPF) is one of the most trusted government-backed savings schemes. Known for its safety, guaranteed returns and tax benefits, it is widely used by investors looking to build long-term wealth and create a retirement corpus.
What is the PPF interest rate?
PPF offers guaranteed interest at 7.1%* annually
Who can open a PPF account?
Any Resident Indian individual can open a Public Provident Fund (PPF) account. Additionally, parents or legal guardians can open a PPF account on behalf of a minor child.
What is the minimum and maximum investment amount in PPF?
To keep a PPF account active, investors must deposit at least ₹500 in a financial year. The maximum amount that can be invested across all PPF accounts in a year is capped at ₹1.5 lakh.
What is the PPF maturity period and extension rules?
A PPF account matures after 15 complete financial years from the end of the financial year in which it was opened. Upon maturity, investors can extend the account for 5 years.
What are the PPF tax benefits?
Public Provident Fund (PPF) tax benefits are categorized under the EEE (Exempt-Exempt-Exempt) regime, providing tax savings at three distinct stages: investment, interest accrual, and maturity
What are PPF withdrawal rules?
The Public Provident Fund (PPF) comes with a 15-year lock-in period. However, investors can make partial withdrawals from the 7th financial year onward. Premature closure is allowed only after five years under specified circumstances, (higher education or serious medical treatment), but there is 1% penalty on interest rate.
What are the PPF loan rules?
Investor can avail a low-interest loan against your Public Provident Fund (PPF) account between the 3rd and 6th financial years of opening it. Investors can borrow against their PPF balance, up to 25% of the amount standing in the account two years earlier. Money must be repaid within 3 years to avoid high interest rate.
What are the documents required to open a PPF account?
- Account Opening Form: Form A (or Form 1), available at authorized bank branches or post offices, or online through net banking.
- Identity Proof: PAN Card (mandatory), Aadhaar Card, Passport, Voter ID, Driving License
- Address Proof: Aadhaar Card, Passport, Recent Utility Bill (Electricity, Telephone), Registered Rental Agreement
- Photographs: Two recent passport-size photographs.
- Nomination Form: Form E, to register a nominee for the account.
For minors:
- Minor’s Age Proof: Minor’s Birth Certificate or School ID.
- Guardian Proof: PAN Card, ID proof, and address proof of the parent/guardian
Who should invest in PPF account?
Those who want to save on taxes and make money should open a PPF account.