Must Knows

PPF: All about Public Provident Fund

[] A long-term saving scheme designed for customers with a low-risk appetite, PPF or public provident fund is a government-led investment option that enables a customer to earn interest on their savings, apart from a guaranteed income.

Public Provident Fund, more commonly known as PPF, is one of the most popular methods in India to channelise savings into investments. Launched in 1968, PPF is one of the most secure methods to earn tax-free interest on your savings.

You are reading: PPF: All about Public Provident Fund

Also know all about EPF passbook, UAN login & PF balance check with UAN number

PPF account: Must-know facts

Minimum investment amount Rs 500
Maximum investment amount Rs 1.50 lakh per year
Interest 7.10%*
Tenure Up to 15 years
Tax benefit Of up to Rs 1.50 lakhs under Section 80C
Risk profile Completely secure**

*In a circular issued in February 2022, the finance ministry decided to fix the PPF interest rate at 7.10%.

**The amount lying in your PPF account is not subject to attachment under any order or decree of a court of law.

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What is a PPF account?

A long-term saving scheme designed for customers with a low-risk appetite, PPF is a government-led investment option that enables customers to earn tax-free interest on their savings aside from a guaranteed income. You can also claim tax deductions under Section 80C on the amount deposited in your PPF account.

It is important to remember that a PPF account can be opened only for an individual and not as a joint account. However, you can add a nominee to the account.

PPF: All about the Public Provident Fund

How to open a PPF account?

You can open a PPF account with public, as well as private banks. You can also open a PPF account through the post office.

Documents needed to open a PPF account

To open a PPF account, you will be asked to submit the following documents:

  • Passport size photos
  • Identity proof
  • Address proof
  • Aadhaar card
  • Income proof
  • Nominee details
  • Due fee

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PPF interest rate

With the government deciding to maintain a status quo on the PPF interest rate in 2022, the current interest rate stands at 7.10%, compounded annually.

Decided by the Finance Ministry from time to time, the PPF interest is paid on March 31 of every year to all account holders.

PPF tenure

The minimum tenure for the PPF is 15 years. This timeline can be extended in blocks of five years. However, your PPF account can be retained indefinitely without further deposit after maturity, with the prevailing rate of interest.

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PPF amount limit

You can deposit a minimum of Rs 500 and a maximum of Rs 1.50 lakhs in your PPF account in a year. In case you deposit more than the maximum amount, the excess amount will not earn interest or be eligible for tax deductions.

PPF instalments

Your PPF contribution can be a one-time payment or submitted in up to 12 instalments. You have to make a deposit in your PPF account at least once a year for the entire 15-year tenure.

PPF opening balance

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A PPF account can be initiated with an opening balance of Rs 500. After this, you can deposit any sum in multiples of Rs 50.

PPF deposit method

You can make deposits in your PPF account through cash, cheque or demand draft. You can also deposit the money through online channels such as net banking and UPI or provide an auto-debit mandate to the bank.

PPF nominee

The PPF account holder has to nominate a person either at the time of opening the account or at any later stage. This nominee can claim the funds, in the case of the demise of the original holder. The nominee can also operate the account, with authorisation from the account holder, in case the original holder is incapacitated.

PPF eligibility

To open a PPF account in India, you need to be an Indian resident. This means that NRIs and Hindu Undivided Families cannot open a PPF account. A PPF account cannot be jointly-owned, unless the secondary account holder is a minor.

PPF maturity

Your PPF account matures on completion of 15 complete financial years, from the end of the year in which the account was opened.

PPF withdrawal

Upon maturity, one can withdraw the entire amount and close the PPF account by submitting Form C to the post office or the bank.

In case you decide not to withdraw funds on maturity, you can withdraw a certain amount once in a financial year.

Partial PPF withdrawal

You can withdraw funds from your account after six years of continuous contribution. However, you can only withdraw 50% of the balance in the PPF account at the end of the fourth financial year, or 50% of the PPF balance at the end of the preceding year, depending on whichever amount is lower. To apply for withdrawal, you have to use Form-C. Such withdrawals can only be made once in a financial year.

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Premature closure of PPF account

A PPF account cannot be closed before the completion of five years from the end of the year in which the PPF account was opened. After this period, you can pre-close your PPF account under the following circumstances:

If your residency status has changed: In case you are moving abroad, you can pre-close your PPF account by submitting documentary proof of your relocation.

If you are moving abroad for higher studies: In case you are leaving the country for higher studies, you can prematurely close your PPF account by providing documentary proof of the same.

Treatment of life-threatening diseases: In case the account holder, his spouse, his dependent children or his parents need to be treated for a life-threatening disease, the holder can prematurely close the account. The holder will need to submit all supporting documents.

PPF tax exemption

You can make up to Rs 1.50 lakhs tax-free from your income, by investing in PPF. This deduction can be claimed under Section 80C of the Income Tax Act. This investment remains the most popular tax-saving tool among India’s middle-class income taxpayers.

Banks where you can open a PPF account

  • State Bank of India
  • Punjab National Bank
  • Bank of Baroda
  • HDFC Bank
  • ICICI Bank
  • Axis Bank
  • Kotak Mahindra Bank
  • Bank of India
  • Union Bank of India
  • Oriental Bank of Commerce
  • IDBI Bank
  • Central Bank of India
  • Bank of Maharashtra
  • Dena Bank

The above list is not exhaustive. An individual can also open a PPF account at the Post Office.

SBI PPF: How to open a PPF account in SBI?

In case you have an existing account with SBI, which is KYC-compliant, you will be able to open an SBI PPF account online through net banking.

Step 1: Log into your account. Go to the ‘Deposits & Investment’ section on top of the page. You will find the Public Provident Fund Option.

Step 2: The next page will give you the option of ‘PPF Account Opening (Without visiting branch)’. Click on this option.

Step 3: Select your account number from which the payment for the PPF account will be made.

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Step 4: Your personal and nomination details will be displayed for verification. Once done, click on ‘Proceed’.

Step 5: Check the ‘I confirm that I haven’t opened any other PPF Account with other banks’ box and accept the terms and conditions before you hit the ‘Submit’ button.

Your SBI PPF account will now be active.

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HDFC Bank PPF: How to open a PPF account in HDFC Bank?

You must have HDFC net banking facility and your Aadhaar number should be linked to your account to open an HDFC Bank PPF account.

Step 1: On your HDFC bank net banking page, click on ‘Public Provident Fund’ and select the ‘PPF Accounts’ option.

Step 2: Enter bank account details from which you would like to pay for your PPF account.

Step 3: Choose if you wish to add a nominee and click ‘submit’.

Step 4: If your Aadhaar is not linked, you must first link it, to complete the process. If your Aadhaar is linked to your HDFC account, your form will be submitted and you will get a message stating that your account would be opened in one working day.

Once you have opened a HDFC PPF account online, you can transfer funds from your savings account to your PPF account.

Also read: HDFC home loan interest rate

Loan against PPF

An account holder can apply for a loan against the PPF between the third and the sixth year. The loan amount, in this case should not exceed 25% of the existing balance. This loan will have to be repaid within 36 months. A second loan can be applied for in the sixth year, once the first loan is entirely repaid.

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PPF calculator

You can use an online PPF calculator to know the amount you would receive, at the time of the PPF account’s maturity.

The formula for calculating expected interest and maturity amount is:

A = P [({(1+i) ^n}-1)/i]

  • A represents maturity amount
  • P represents the principal amount
  • i represents the expected interest rate of return
  • n is the tenure

How to check the PPF account balance online?

Open the net banking interface of the bank where you have opened your PPF account. Click on your PPF account number to check your PPF balance and other details.

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When to deposit money in a PPF account?

There are no specific datelines to deposit money in your PPF account. However, it is advisable to deposit the money between April 1 and 5 of a financial year. You can also make monthly deposits within the fifth day of every month to earn monetary gains.


What is PPF?

PPF or Public Provident Fund is a savings scheme under which investors are offered a definite interest on their savings.

What is the PPF minimum amount limit?

The minimum amount limit for PPF is Rs 500. This deposit could be a lump-sum payment or could be deposited in 12 instalments.

What is the PPF maximum amount limit?

The maximum amount limit for PPF is Rs 1,50,000. This deposit could be a lump-sum payment or could be deposited in 12 instalments.

What if you fail to deposit any amount in your PPF account in one or more financial years?

If the PPF customer does not deposit the minimum amount of Rs 500 on the completion of the financial year, a penalty of Rs 50 will be levied per year of default.

I opened my PPF account when I was a resident Indian. Now, I am a non-resident Indian. Can I continue my PPF account?

PPF accounts of resident Indians who became NRIs during the maturity period are deemed closed from the date from which the account holder becomes an NRI.

For how many years can a PPF account be extended?

A matured PPF account can be extended any number of times in blocks of five years.

Which bank is the best for a PPF account?

All banks offer a government-specified interest rate on PPF. Therefore, choose a bank where you have an existing savings account.

How many PPF accounts can be opened?

An individual can have only one PPF account in India.

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

A PPF account has a minimum lock-in period of 15 years.

Do I have to withdraw the PPF account balance at the end of the 15 years?

No, you do not have to withdraw the PPF balance at the end of 15 years. Your money will continue to earn interest.

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Category: Must Knows

Debora Berti

Università degli Studi di Firenze, IT

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