All About Public Provident Fund (PPF): Features & Benefits

Public Provident Fund (PPF)

 What is a Public Provident Fund?

A Public Provident Fund (PPF) is a popular savings scheme in India that came to act in 1968. With this PPF, in the form of an investment, one can make a small saving and get a good return from it. The other name of PPF is savings-cum-tax savings investment vehicle. The PPF account full form is the Public Provident Fund. One can build good savings to spend after retirement, and one can save annual taxes. This gives clear ppf meaning in simple words.

If you are the one looking for a safe investment option that provides guaranteed returns, then PPF will serve as the best option. This long-term investment option offers an attractive interest rate for investors on the invested amount. Here the advantage is both interest and returns do not apply to taxes under income tax. To get the benefit of this PPF, open a PPF account and invest your amount which you can claim later under 80C deductions with the interest amount.

Why open a PPF Account?

A PPF account means the best for individuals who can accept low risks. As this is an Indian government plan, one can expect guaranteed returns from the PPF fund to protect your financial status. Here the invested funds never link to the market, so you don’t have to worry about inflation. Whenever there is a downswing in the business cycle, PPF still offers stable returns on your investment.

Features of a PPF Account

The key features of a PPF scheme are in the following list.

Investment Tenure

A PPF account has a maturity period of 15 years. Before this lock-in period, one can’t withdraw the funds completely. But the investor can extend the maturity period to 5 more years once the lock-in period is over.

Principal Amount

One can invest a minimum of Rs. 500 and a maximum of Rs. 1.5 Lakh under this public provident fund scheme annually.  One can make this investment through an installment basis or lump sum amount.

Deposit Frequency

To make installment payments, an individual is eligible for only 12 yearly payments. For your account to stay active throughout the maturity period, one has to invest every year in a PPF scheme.

Loan against investment

Public Provident Fund allows you to avail loans against your investment amount. But one can avail this loan facility from the beginning of the 3rd year of the maturity period to the end of the 6th year. The calculation of the year starts from the date of account activation. For loans, the maximum tenure is 3 years. One can get a loan amount of 25% or less than that of your investment amount.


At the time of opening the PPF account, one can choose a nominee for the PPF account holder. After some time too, you can choose a nominee.

Mode of Deposit

One can deposit the investment amount through cash or Demand Draft or Cheque or online money transfer.

Joint accounts

Opening a joint account is not possible under the PPF scheme. Only one individual can open the PPF account using his/her name.

Benefits of opening a PPF Account

  • Since PPF investment is a Government-based scheme, your investment amount and interest for the same are safe in your PPF account.
  • Both the contributions that you make under this PPF scheme of up to Rs. 1.5 Lakhs p.a. and the interest that you get for the contributions are free from tax.
  • The rate of interest varies every quarter, as per the declaration of the Indian Government. One can get higher returns from PPF than the FD scheme of banks.

Eligibility Criteria to open a PPF account

  • Any individual who is an Indian resident is eligible to open a PPF account.
  • Non-resident Indians are not eligible for this PPF scheme. However, this is possible for Indian citizens who are eligible to open the PPF account who later become Such NRIs can continue investing in PPF until the lock-in period.
  • Parents or guardians are eligible to open PPF accounts for their minor children.
  • PPF scheme doesn’t allow opening joint accounts or multiple accounts.

How to open a PPF account?

One can open PPF accounts at post offices, private banks like ICICI, Axis Bank, and nationalized banks. One can open a PPF account online in private banks such as ICICI Bank, Axis Bank, etc. through net banking. Once you open a PPF account, you will get a passbook similar to your bank passbook. The passbook contains all records of transactions such as interest on ppf taxability, subscriptions, withdrawals, etc. Some banks allow seeing PPF entries online rather than issuing a passbook.

Documents Required to Open a PPF Account

You may require the following documents to open a PPF account.

  1. PPF account opening form (Form A) and get this form from banks or download it online
  2. ID proof like Voter ID, PAN card, Aadhar card, etc
  3. Address proof
  4. Passport size photograph of the PPF account holder
  5. Nomination form to choose a nominee

PPF Login and Registration Process

To open a PPF online account, you need to follow the below steps:

  • You should have an account in a bank where you plan to open your PPF account
  • Log in to the particular banking portal
  • Check for the option ‘Open a PPF Account’ and click on it
  • Now, choose either the option ‘self account’ or ‘minor account’
  • Furnish the details like nominee details, bank details, etc
  • Verify the Permanent Account Number (PAN), which you will see on the screen
  • After the verification process, enter the investment amount under the PPF scheme
  • Now, you need to provide standing instructions based on which the bank deducts the amount following certain intervals or as a lump sum
  • Now, you will get an OTP and check it on your registered phone number
  • Some banks may ask you to provide a hard copy of the details. Submit them with your reference number
  • All these details submit them to the bank where you have a PPF account. You can also visit the official website of the Indian post office to open post office ppf online account

PPF Passbook

PPF is a long-term investment to get guaranteed returns. To check your account balance, you can refer to EPFO. PPF passbook is a useful way to check the details of all the deposits that you made in the PPF account.

How to check PPF Account Balance?

Here is the simple procedure to check about PPF account balance:

  • Before you want to check, ensure that the online banking of your bank account is active
  • Using banking credentials, you can log on to the PPF account
  • As soon as you log in, you can see your PPF account balance on the screen
  • You can use internet banking to transfer funds to your PPF account online. Based on your standing instructions that you set for your PPF account, you can transfer funds. To apply for a loan against PPF, download the PPF account statement and submit it to the respective bank

List of Banks where you can open a PPF account

Allahabad Bank IDBI Bank
Canara Bank Axis Bank
Central Bank of India Vijaya Bank
Indian Bank SBI
Union Bank of India Bank of Baroda
Dena Bank Bank of Maharashtra
Indian Overseas Bank Punjab National Bank
ICICI Bank Oriental Bank of Commerce
Bank of India State Bank of Bikaner & Jaipur
State Bank of Patiala State Bank of Hyderabad
State Bank of Mysore State Bank of Travancore
Corporation Bank United Bank of India

PPF Interest Rate

The central government of India decides the interest rate on PPF every three months once. The central government aims to offer higher interest rates for PPF account holders when compared to the interest rate of commercial banks. The current interest rate is 7.1%, which changes quarterly.

The government decides the interest rate based on the deposits of the PPF account holders. The lowest balance before the 5th of every month decides the public provident fund interest rate. It is better to make deposits from 1st to 5th of the month to increase your returns.

 Period Rate of Interest (%)
January to March 2019 8.0
April to June 2019 8.0
July to September 2019 7.90
October to December 2019 7.90
January to March 2020 7.90
April to June 2020 7.10
July to September 2020 7.10

PPF Tax Benefits & features

One can get income tax exemptions for the invested amount in a PPF scheme. One can claim the entire investment amount under Section 80C of the Income Tax Act of 1961. But one should keep in mind that the total principal amount should not exceed Rs. 1.5 lakhs. Another benefit is the interest amount that you earn from this deposit, which is also exempt from any tax calculations.

This means the entire amount that you get after the maturity period is free from taxation. This makes the PPF scheme attractive to the people in India.

PPF Account Opening Form

One can open a PPF account in post offices within 4 steps:

  1. Visit the nearest post office to get an application form.
  2. Fill up the Form A to open a PPF account in a post office. Submit it to the post office along with KYC documents and the photograph of you.
  3. The PPF minimum deposit is Rs. 500 and the maximum amount is Rs. 70,000. You can deposit this maximum deposit initially to the post office. Later, you can deposit within Rs. 1.5 lakhs
  4. Once the procedure is over, you will get a passbook containing all the necessary details. Also, you can refer to the official website of the Indian post office to open post office ppf online account.

For PPF, there are various forms that you may need to know before applying it.

 Forms Purpose
PPF Form A For opening a PPF account
PPF Form B To make a contribution
PPF Form C To make a partial withdrawal
PPF Form D To avail loan
PPF Form E Nomination
PPF Form F To change nominee
PPF Form G Claim
PPF Form H To extend the PPF scheme further

PPF Withdrawal

One can close the PPF account only after completing the maturity period of 15 years. Upon completion of the maturity period, one can withdraw the entire deposit amount along with the interest rate without paying taxation.

If the account holder wants to withdraw funds before the maturity period, then the scheme allows partial withdrawal of the amount after the completion of six years. The account holder can get a maximum of 50% amount at the end of 4th year. Then one can make withdrawals yearly once in the maturity period.

Procedure for withdrawal from PPF

To make a partial withdrawal in your PPF account, you need to submit the Form C. Get the Form C from the respective bank where you have an account. Form C has 3 sections such as declaration section, office use section, and bank details section.

Declaration Section – Enter your PPF account number and the amount you want to withdraw from the PPF amount. Mention the number of years that you have completed already in this PPF scheme.

Office Use Section – Furnish the opening date of the PPF account. Provide the withdrawal amount, sanctioned withdrawal amount, etc.

Bank Details Section – Issue the details of the bank where you need to get your amount credited.

Nomination Rules for PPF Account

To choose a nominee or to change a nominee, here are the rules that one has to follow:

  • With the favor of one or more persons, one has to make a nomination. If one specifies more than one person as a nominee, then you need to specify the percentage for each nominee.
  • For minor’s PPF account, one can’t make any nominations
  • One can nominate the spouse, parents, friends, and relatives, etc, as a nominee
  • To add a nominee, submit the Form E to the respective bank
  • Throughout the maturity period of the account, one can choose a nominee or cancel a nominee. For changing nominee, you need to submit Form F.
  • An account holder has to sign the nomination form and also provide two witnesses. Nominee’s signature is not needed.

Loan against PPF

One can avail loan facility against PPF scheme from 3rd year to 6th year of the maturity period. After the expiry of one year, one can get the loan benefits. But ensure that you take this loan opportunity before the expiry of five years. To get loan benefits, one has to submit the Form D to the respective bank or post office. You need to provide the details like account number, borrowing amount, etc. You should specify that you repay the amount with interest within three years.

A Revival of Inactive Account

Your PPF account becomes inactive if you didn’t maintain the ppf minimum amount of Rs. 500/year. If your account becomes inactive, then follow the below steps:

  1. One has to submit the written request to the respective bank or post office to reactive your PPF account
  2. One has to pay a fine amount of Rs. 50 for each year of inactive account
  3. One has to pay a minimum arrear amount of Rs. 500 for all the years of the account being inactive

PPF Transfer

One can transfer the PPF account from the post office to the bank or bank to the post office. One can also transfer the PPF account between different bank branches of the same bank.

How to close a PPF account?

Premature closure of the PPF account is not available within 5 years of the maturity period. One can close the PPF account for specific reasons such as life-threatening ailments that affect the PPF account holder, spouse, parents, or children. But to claim the premature closure of the PPF account, one has to submit the medical documents to the respective bank or post office.

Premature Termination

One can close the post office public provident fund account prematurely after the completion of the first five years for the following reasons:

  1. To continue higher education of the PPF account holder or for the education of the minor account holder
  2. If the account holder or spouse or children of the account holder suffers from life-threatening diseases

Death of Account Holder

In the event of the death of the PPF account holder, the nominee can claim the proceeds of the PPF account. Here the claimant should submit the Form G application. You need to fill the Form G details such as nominee details, account number, etc. One has to submit documents such as Form G, death certificate of the account holder, passbook, etc.

FAQ’s on PPF

Q1: Can one withdraw PPF after 5 years?

Ans: Yes, you can withdraw the PPF amount after 5 years. Also, you can withdraw the whole amount after 5 years and close the account.

Q2: Can one person have 2 PPF accounts?

Ans: No, it one can’t open 2 PPF accounts. But the family can have multiple PPF accounts.

Q3: Whether a senior citizen can open a PPF account?

Ans: To open a PPF account, there is no upper age limit for senior citizens. Any residents of India can open a PPF account without age limitations.

Q4: What is the PPF maturity period?

Ans: The lock-in period for the PPF scheme is 15 years. After the completion of 5 years, one can make the premature withdrawal of the total amount under certain situations.

Q5: What is the minimum contribution to the PPF account?

Ans: The minimum amount to open a PPF account is Rs. 500.

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