PPF account benefits, interest rate, PPF withdrawal, and rules

PPF – stands for Public Provident Fund, and it’s one of the safest savings instruments in India, which allows you to deposit a minimum amount of Rs 500 per year and an upper ceiling of Rs 1.5 lakhs per year. It bears interest at the rate of 8% per annum on investments made up to March 31, 2001, and on further investments at the rate of 7.6% per annum.

What is PPF Account

The Public Provident Fund (PPF) is a long-term savings scheme under which investors can deposit a minimum amount of Rs. 500 annually in a tax-saving investment plan.

It is similar to National Savings Certificate (NSC) but with a few added features like higher rates of interest and a maturity period of 15 years. To avail of all these features, one must invest at least Rs 1 lakh every year. The scheme was launched in 1968 by RBI as an instrument for the general public to save for their future needs.
There are many factors that an investor should consider before opening a PPF account. Firstly, it’s important to decide how much you need to invest for your future goals.

While Rs 1 lakh is mandatory every year (you can deposit more as well), you can save any amount from Rs 500 to Rs 1 lakh per annum.

How to open PPF Account

You can start a Public Provident Fund (PPF) account by visiting your bank or other licensed money lenders. To open a PPF, you will have to submit an application to your bank along with two passport size photographs and proof of identity.

You can then deposit cash in any amount between Rs 500 to Rs 1 lakh (Rs 10,000 from April 2017). The maximum deposit period is 15 years for more information on how to open a PPF account online.

PPF – Benefits

There are many advantages of investing in a Public Provident Fund (PPF) Account. For example, it’s an ideal way to save for short-term goals like funding children’s education or saving up for a rainy day. However, that’s not all!


The main advantage of investing in a PPF Account is its tax-free income. Plus, you can save up to ₹1.5 lakh per year! This limit gets reevaluated every financial year based on inflation.

To top it off, since a public provident fund is for long-term goals like retirement savings or children’s education funds, there are no restrictions on how you spend your money after your 60th birthday. Even better?


Every month while you’re working, your employer deducts a certain amount from your paycheque. This is taken as your contribution towards your PPF Account. The government also contributes to your public provident fund savings. So if you earn ₹15,000 per month, ₹500 will be contributed to your ppf every month by both you and the government.

PPF account benefits, interest rate, PPF withdrawal, and rules
PPF account benefits, interest rate, PPF withdrawal, and rules

PPF – Eligibility Criteria

In order to open a PPF account, a customer must be above 18 years of age. There is no upper limit for investment in PPF. All other products have an upper investment limit of Rs 1 lakh, but there is no such restriction for investments into PPFs.


The investor must be a resident Indian for all these years. Non-resident Indians (NRIs) cannot open an account in India. However, investments from NRI accounts can be transferred to resident Indian PPF accounts under certain provisions.

There is no upper age limit on making contributions to a PPF account. Investors between 18 years and 50 years are eligible to open an account without any upper age limit.

PPF – Registration Rules

You can invest in Public Provident Fund (PPF) for a period of 15 years. In order to invest in a PPF account, you need to be at least 18 years old. It is compulsory for you to fill up Form-B before your application gets processed by any bank. The final maturity date of your PPF is 60 months from the date on which it was opened.


When you open a Public Provident Fund (PPF) account, banks ask for details such as your PAN card or Aadhar card number. Additionally, if you are an NRI (Non-Resident Indian), you also need to furnish a certificate from an authorized NRE/FCNR banker in India about your non-resident status.

PPF – Maturity Benefit & Withdrawal Rules

If you are planning to invest in Public Provident Fund (PPF) account, then you must know about the maturity benefit and withdrawal rules of PPF.

If you don’t know about the maturity benefit of your PPF Account, then read our complete post on Maturity Benefit & Withdrawal Rules of PPF Account. Read our complete post to Know When Can I Withdraw From My PF Account.

Comparison between NSC & PPF

Public Provident Fund (PPF) NSC Eligibility To open a National Saving Certificate (NSC), you must be An Indian citizen aged 18 years or above; and a Resident of India. Eligibility for Public Provident Fund No upper age limit for PPF account holders.

The maximum amount that can be contributed to PPF is Rs 1.5 lakhs in a financial year. About NSC Account The maximum tenure of an NSC is 15 years.


If you have a limited time horizon—say ten years—then an NSC may be a better choice for you. However, if you can keep your money invested for a longer term of 15 years or more—for instance, if you’re close to retirement—PPF might be more beneficial in terms of growth. Eligibility No upper age limit for PPF account holders. The maximum amount that can be contributed to PPF is Rs 1.5 lakhs in a financial year.

PPF account benefits, interest rate, PPF withdrawal, and rules

What is the minimum investment in ppf?

The minimum investment in Public Provident Fund (PPF) is Rs 500 per year. This amount can be invested at one go or in 12 equal monthly installments of Rs 3750. The deposit period for PPF is 15 years, but premature withdrawals are not allowed after five years from the commencement of the deposit. That means you can withdraw your deposit before maturity only if five years have passed or upon completion of the 5th year if it is less than five years from the commencement of deposit.


What is even more amazing is that, unlike other schemes where you get a higher return if you invest a high amount in a single year or early in the deposit period, there is no reduction in interest rates for PPF if you opt to make big investments. For example, as of January 1, 2019, an investor will earn 8.7% if he makes an investment of Rs 1 lakh, but he can also earn 8.7% even if he invests just Rs 500 per year over 15 years.

Best pf scheme for new employees? Which is better, NSC or ppf?

Public Provident Fund (PPF) Account Benefits, Interest Rate, PPF withdrawal, and rules- 2022 Public Provident Fund is one of the most beneficial schemes from govt of India.

Contribution in Public provident fund(ppf) is made with 100% income tax deduction up to Rs. 1.5 lacs a year. This means that if you deposit 1 lakh in pf, then your taxable income will reduce by 1 lakh.

how to open ppf account in sbi

If you’re looking to invest for a short-term goal (say five years or less), then you might want to consider opening a fixed deposit (FD) instead. In that case, it makes sense to open an individual FD in a public sector bank like the State Bank of India (SBI).

You can open an SBI FD by visiting your nearest branch or online through its website. There is no minimum deposit amount required to open an SBI FD—you can make as low as Rs 5,000.

ppf rate of interest 2020-21

Public Provident Fund (PPF) is a term deposit scheme. The maturity period of 15 years makes it an ideal retirement savings option. Interest rates on PPFs are revised every quarter by the Finance Ministry in India. The current ppf rate of interest for 2021-22 is 7%.

Rs10 lakh can be invested in either a Fixed Deposit or Public Provident Fund (PPF). An additional amount of up to Rs50,000 can be invested in Tax Saving Mutual Funds like ELSS without payment of tax.

how to open ppf account in hdfc

Public Provident Fund (PPF) is a type of long-term saving scheme that enables investors to deposit up to Rs 1.5 lakh annually in a tax-free manner for a period of 15 years. Here’s everything you need to know about opening a PPF account with HDFC Bank. This will also help you determine if it is right for your investment needs or not.

how to open ppf account in the post office

The first step to opening a PPF account is to collect all necessary documents. In case you want to open an account at a post office or by post, then you will need Form 1, which can be obtained from any post office. It can also be downloaded directly from its official website.

Once you fill it up with details such as your name, address, and sign on it, you have to send it back by getting your signature verified by any gazetted officer.

how to transfer ppf account from one bank to another

Once you open a PPF account with your bank or financial institution of choice, you will be given information on how to make deposits. You will also receive a permanent passbook that contains details of every deposit you have made. This is where you’ll keep track of your investments for tax purposes.
When it comes time to withdraw money from your PPF account, you may do so without paying any taxes. The 10% premature withdrawal penalty only applies if you withdraw funds before the completion of five years in a lump sum. But if you need money at any point before then, here are some things to consider:

how many ppf accounts can be opened

You can open only one ppf (public provident fund) account in your lifetime. Also, it is not possible to have more than one ppf (public provident fund) account in a single bank simultaneously.

Moreover, you are allowed to transfer an existing public provident fund from one bank to another once every five years and that too after completion of 3 years from the date of opening.

post office scheme to double the money

If you have a post office savings account, now’s the time to invest in Public Provident Fund (PPF). As promised in his budget speech, PM Narendra Modi has hiked the tax-free PPF investment limit from Rs 1.5 lakh to Rs 2.5 lakh from April 1.

This is great news for investors looking to park some money in high-yielding tax-saving instruments that also come with a host of financial benefits on maturity.

conclusion

The Public Provident Fund (PPF) is a safe investment option offered by banks and post offices in India. It allows you to invest a lump sum amount of money for a period of 15 years which can be increased up to 20 years. The interest earned is tax-free and paid on maturity along with the principal.

FAQs on how to invest in PPF

Whether you’re a seasoned investor or a first-time buyer, funds can be daunting. But they don’t have to be. So here are answers to some frequently asked questions on mutual funds.


The public provident fund (PPF) scheme is a long-term investment option that offers tax breaks. Here are some frequently asked questions on how to invest in PPF accounts. These answers will help you understand how PPF works and its investment process.

Why invest in a PPF?

The benefit of a Public Provident Fund (PPF) account is that it offers you a higher interest rate than most other savings accounts or fixed deposits. The current PPF interest rate is 8.7% for investors in their early 20s up to 7.7% for those over 60 years old.

How much does it cost to invest in a PPF?

The maximum amount you can invest in a Public Provident Fund (PPF) is Rs 1.5 lakh for a full financial year. This includes both your principal contribution as well as any additional deposits that you make into your PPF before 31 March of the next financial year. For example, if you want to contribute Rs 50,000 to your PPF on 1 April 2018, then you can deposit another Rs 50,000 between 1 April 2018 and 31 March 2019.

What happens when I make partial withdrawals from my account?

You can make partial withdrawals from your account any time you want. Partial withdrawals will be counted towards your total amount of investment in 15-year blocks. For example, if you withdraw ₹100 from your ₹1 lakh investment after 1 year (₹1 lakh in all), it will be counted as a 15-year block. If you then choose to make another partial withdrawal after another 2 years (now 2 years into your first 15-year block), it will count as another 15-year block.

How do I close my account if I don’t need it anymore?

You can close your PPF account at any time. But you will lose any part of your deposit that hasn’t been used yet to buy an annuity. Once you have bought an annuity, there is no way to withdraw it without ending up with a negative balance in your account. Also note that once you close an existing account, you cannot open another one under a different name or address.

What is deemed ownership?

Any individual Indian citizen or person of Indian origin is eligible to open a PPF account. A Non-Resident Indian (NRI) can also open a PPF account in India provided he/she fulfills certain conditions laid down by FEMA (Foreign Exchange Management Act). However, there is no restriction on ownership as per government norms.

Are there any risks associated with investing in mutual funds?

One of the key questions investors have is whether or not there are any risks associated with investing in mutual funds. And it is a fair question to ask since you are putting your hard-earned money at stake by investing in mutual funds. The good news for you is that there aren’t many risks associated with investing in mutual funds. However, there are certain factors that might pose a significant risk to an investor’s investment portfolio.

How do I choose a fund to invest in?

Knowing your investment goals will help you choose a fund that fits your requirements. Generally speaking, equity funds are suitable for long-term investment while debt funds are best suited for short-term purposes. If you want to invest in mutual funds, consider investing via Systematic Investment Plan (SIP) or in a lump sum by subscribing to direct plans.

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