Public Provident Fund (PPF) Account

The Public Provident Fund (PPF) is a popular long-term investment and savings scheme started by the Government of India. It was introduced in 1968 to encourage individuals to create a retirement fund…

The Public Provident Fund (PPF) is a popular long-term investment and savings scheme started by the Government of India. It was introduced in 1968 to encourage individuals to create a retirement fund and accumulate wealth over time. This comprehensive guide will explore everything you need to know about the Public Provident Fund (PPF).

What is the Public Provident Fund (PPF)?

The Public Provident Fund is a savings scheme set up by the Government of India to encourage individuals to save for the long term. It is regulated by the Ministry of Finance and administered by designated banks and post offices nationwide. PPF provides individuals with a safe and reliable opportunity to invest and grow their savings for 15 years.

Importance of Public Provident Fund Account (PPF Account)

The Public Provident Fund (PPF) account is important in personal finance and long-term savings. Here are some key reasons why a PPF account is essential:

  • Secure and Stable Investment
  • Attractive Interest Rates
  • Long-Term Wealth Creation
  • Tax Benefits
  • Flexibility in Contributions
  • Loan and Partial Withdrawal Facility
  • Retirement Planning
  • Transferability and Nomination

Key Features of a PPF Account

The key features of a public provident fund scheme (PPF Scheme) are listed as follows:

Interest Rate of PPF

7.1% per annum

Tax Benefit

Up to INR 1.5 lakh under Section 80C

Risk Profile

Offers guaranteed, risk-free returns

Minimum Investment Amount

INR 500

Maximum Investment Amount

INR 1.5 lakh per annum.


15 years

Eligibility for PPF (Public Provident Fund) Account

Any person who wants to invest in a PPF account must be an Indian citizen. A person can have only one PPF (Public Provident Fund) account but can open another account in the name of a minor. HUFs and NRIs are not eligible to open a PPF account. But, if there is an existing PPF account in their name, it will remain active till completion.

Benefits of the Public Provident Fund (PPF)

You can get a wide range of benefits under the Public Provident Fund (PPF). Below are some of the benefits of a PPF account:

  • Attractive Interest Rate: Currently, PPF accounts offer a compelling 7.1% interest rate compounded annually, significantly higher than most savings accounts.
  • Tax Benefits: Your investment is eligible for tax deduction up to a limit of INR 1.5 lakh under Section 80C of the Income Tax Act. Additionally, the interest earned and maturity amount are entirely tax-free.
  • Long-Term Investment: With a maturity period of 15 years (extendable in blocks of 5 years), PPF encourages disciplined savings and promotes a long-term perspective on wealth creation.
  • Loan Facility: After completing 3 years of investment, you can avail of a loan against your PPF balance for specific purposes, offering financial flexibility in times of need.
  • High Security: Government backing ensures the safety of your investments, minimizing risk and providing peace of mind.
  • Partial Withdrawal: Partial withdrawal is permitted from the seventh financial year. The amount of withdrawal is limited to 50% of the balance at the end of the fourth year preceding the year of withdrawal.
  • Nomination Facility: PPF accounts provide the option to nominate one or more individuals who will receive the corpus in the event of the account holder's demise.
  • Transferability: PPF accounts can be transferred from one authorized bank or post office to another or from one individual to another, subject to certain conditions and procedures.

Comparison of Public Provident Fund (PPF) with Other Investment Options

When considering investment options, it is essential to compare the Public Provident Fund (PPF) with other alternatives to make an informed decision. Let's compare PPF with some commonly considered investment options:

  • Fixed Deposits (FDs): PPF offers higher interest rates than FDs and the added benefit of tax deductions and tax-free returns.
  • National Savings Certificate (NSC): While NSC offers a similar tenure and government backing, PPF provides greater flexibility regarding contributions and withdrawals.
  • Employee Provident Fund (EPF): EPF is an employer-employee contribution-based retirement scheme, whereas PPF is a self-contributory scheme open to all individuals.

Public Provident Fund (PPF) Tax Benefits

  • Tax Deductions: Contributions made to PPF accounts are eligible for tax deductions under Section 80C of the Income Tax Act, up to INR 1.5 lakh per financial year.
  • Tax-Free Interest and Maturity Amount: The interest earned on PPF and the amount received at maturity are both tax-free, making PPF a highly tax-efficient investment option.

How to Open a PPF Account?

You can open a Public Provident Fund (PPF) account in two ways, i.e., online and offline. Below, we have explained both processes in detail:

Online Account Opening Process

  • Visit the provider's website and go to the online PPF account opening section.
  • Fill out the online PPF account opening form. 
  • Enter your personal details, nominee details, and preferred contribution mode.
  • Upload the scanned copies of required documents like PAN card, Aadhaar card, address proof, and photographs.
  • Complete the e-verification process and make the initial deposit through Internet Banking.
  • If everything is in order, your PPF account will be activated, and you'll receive your account details online.

Offline Account Opening Process

  • You can open a PPF account at designated branches of authorized banks, post offices, or online banking platforms.
  • Ensure you have the following documents available:
  1. Identity proof
  2. Address proof
  3. Passport-sized photograph
  • Collect an account opening form (Form A) from the bank or post office.
  • Fill out the form with your personal details, nominee information, and preferred contribution mode.
  • Submit the completed form along with the required documents and initial deposit to the bank or post office representative.
  • Once the document is verified, your PPF account will be activated. You'll receive a passbook containing your account details.

Withdrawal Under the Public Provident Fund (PPF) Scheme

Withdrawal from your PPF account is a simple task, but it is necessary to understand the rules and implications before taking any decision. Here are the details of withdrawal options in the PPF scheme:

  • Maturity withdrawal after 15 years
  • Extension of 5 years to extend the account for further contribution
  • Partial withdrawal is allowed after 6 years

Process of Withdrawal from PPF Account

PPF account offers two types of withdrawal: partial withdrawal and maturity withdrawal. In the below section, we have explained both the withdrawal processes in details:

Partial Withdrawal

  • Download or collect the PPF withdrawal form (Form C) from your bank or post office.
  • Fill out the form with your account number, withdrawal amount, reason for withdrawal, and nominee details.
  • Attach your PPF passbook and other required documents.
  • Visit your PPF account branch and submit the completed form with the documents to the bank or post office representative.
  • Your request will be processed and verified. Upon approval, the withdrawal amount will be credited to your bank account linked to the PPF.

Withdrawal at Maturity

  • Duly Fill and Submit Form C or Form 2 (depending on your bank's requirement) along with your PPF passbook to the bank or post office representative.
  • Your account will be closed upon withdrawal, and the amount will be credited to your linked bank account.


The Public Provident Fund (PPF) is an excellent investment option for individuals looking for long-term savings, stable returns and tax benefits. With its attractive interest rates, tax exemptions and flexibility in deposits and withdrawals, the PPF scheme offers a safe and reliable investment opportunity for both salaried individuals and self-employed professionals. By investing in a PPF account, you can achieve financial stability, build a retirement corpus and enjoy tax benefits. Avail this government-backed investment scheme and start the journey towards financial security and wealth creation with PPF. Start investing today and secure your future tomorrow.

Public Provident Fund (PPF) FAQs

  1. Who can open a PPF account?

Ans. Any resident Indian, including minors through their guardians.

  1. Where can I open a PPF account?

Ans. Authorized branches of banks, post offices, and some online banking platforms.

  1. What documents are required?

Ans. Identity proof, address proof, photograph, and initial deposit amount.

  1. Can I have more than one PPF account?

Ans. You can have only one PPF account, but you can open one for a minor.

  1. How often can I contribute to my PPF account?

Ans. As many times as you want within the financial year, the total contribution cannot exceed INR 1.5 lakh.

  1. What is the minimum and maximum investment in a PPF account?

Ans. You can invest INR 500 per year, up to a maximum of INR 1.5 lakh annually.

  1. When can I make partial withdrawals?

Ans. After completing 6 years from account opening, once per year.

  1. What is the penalty for partial withdrawals?

Ans. Interest earned on the withdrawn amount is forfeited.

  1. What happens to my account at maturity?

Ans. You can withdraw the entire amount or extend the account in a block of 5 years.

  1. Is the interest earned on PPF taxable?

Ans. No, the interest income and maturity amount are tax-free.

  1. Are contributions to PPF eligible for tax deductions?

Ans. Yes, up to INR 1.5 lakh under Section 80C of the Income Tax Act.

  1. Can I nominate someone for my PPF account?

Ans. Yes, nominating a beneficiary ensures smooth funds transfer in case of death.

  1. Can I transfer my PPF account to another bank or post office?

Ans. Yes, you can quickly transfer your account without affecting your balance or maturity date.

  1. What happens if I don't contribute to my PPF account for a year?

Ans. Your account becomes inactive, but you can revive it by paying a penalty along with your next contribution.


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