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The Public Provident Fund (PPF) scheme encourages regular savings with a safe, long-term investment offering good interest Read More... rates, promoting financial security. Read less

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Looking for a safe and reliable way to grow your savings? The Public Provident Fund (PPF) scheme, backed by the government, offers a great opportunity for long-term investment with attractive interest rates.

What Is the Public Provident Fund (PPF) Scheme?

The PPF scheme is a popular government-backed savings plan that helps individuals build wealth over time. Operated by the Department of Posts under the Ministry of Communications, it's designed to promote disciplined saving habits and ensure financial security for the future. The interest rate is reviewed periodically by the government, ensuring competitive returns.

Who Can Benefit From This Scheme?

This scheme is open to all resident citizens of India. It's a fantastic option for anyone looking for a secure investment that offers growth and tax benefits. You can also open an account for a minor or a person with intellectual disability, provided you are their legal guardian.

Why This Scheme Is Important

PPF is important because it offers a combination of safety, good returns, and tax benefits. It encourages individuals to save regularly, helping them achieve their long-term financial goals like retirement planning, children's education, or buying a house. The scheme's structure promotes consistent saving, making it a reliable tool for wealth creation.

Objective

The Public Provident Fund (PPF) scheme encourages regular savings with a safe, long-term investment offering good interest rates, promoting financial security.

Benefits

The primary benefit is the provision of various business tool-kits to eligible beneficiaries so that they can engage in small business activities and become self-employed and financially self-sufficient.

The tool kits are given under the scheme targeted at nomadic and de-notified castes.

The annual income limit for eligibility is ₹6,00,000 (for the family) for most of the target groups.

Among the SEBC castes, the income limit is removed for Nomadic and De-notified Castes and backward castes.

Sources and references

Guidelines (S.No. 327)

Eligibility Criteria

Any resident individual can open a PPF account.
A guardian can open a PPF account on behalf of a minor or a person with mental illness or intellectual disability. However, only one account can be opened for such individuals by any guardian.
Joint accounts are not permitted under this scheme.
Accounts can also be opened through the e-Banking facility. A prerequisite for this is having a Post Office Savings Account. You can visit www.ebanking.indiapost.gov.in for more details.

How To Apply for a PPF Account

You can open a PPF account in two ways:

At a Post Office: Visit your nearest post office and request a PPF account opening form. Fill it out with your details and submit it along with the required documents and your initial deposit.
Through Internet Banking: If you have a Post Office Savings Account, you can use the e-banking facility to open a PPF account. Visit www.ebanking.indiapost.gov.in for instructions.

Documents Required

Identity Proof (e.g., Aadhaar Card, PAN Card, Voter ID, Passport)
Address Proof (e.g., Aadhaar Card, Electricity Bill, Bank Statement)
Passport-size Photographs
Initial Deposit Slip or Cheque

FAQ’s

What's the interest rate on the Public Provident Fund (PPF)?

The Public Provident Fund (PPF) scheme currently offers an interest rate of 7.1% per annum. The government reviews and notifies this rate periodically.

Can I open a PPF account for my child?

Yes, absolutely! As a guardian, you can open a PPF account on behalf of a minor. However, only one account can be opened for a minor by any guardian.

What is the minimum amount I need to deposit each year?

To keep your PPF account active, you must deposit a minimum of ₹500 in a financial year.

Is there a limit to how much I can deposit in my PPF account annually?

Yes, the maximum amount you can deposit in your PPF account in a financial year is ₹1.5 lakh. This limit includes deposits made into any accounts opened on behalf of a minor.

How often can I deposit money into my PPF account?

You have the flexibility to deposit money any number of times within a financial year, as long as each deposit is ₹50 or more, and the total doesn't exceed ₹1.5 lakh.

Can I get a loan against my PPF balance?

Yes, after one year from the end of the year you opened your account, but before five years, you can apply for a loan. The loan amount can be up to 25% of the balance available at the end of the second year before the loan application year.

Does the PPF scheme offer any tax benefits?

Yes, PPF is quite tax-efficient! Your deposits are eligible for deduction under Section 80C of the Income Tax Act, and the interest you earn is completely tax-free.

How is the interest calculated for PPF?

Interest for a calendar month is calculated on the lowest balance available in your account between the 5th day and the end of that month. The interest is then credited to your account at the end of each financial year.

Can two people open a joint PPF account?

No, joint accounts are not permitted under the Public Provident Fund scheme. Each individual must open their own separate account.

How can I deposit money if I'm not near a post office?

If you have a Post Office Savings Account, you can make subsequent deposits into your PPF account through the internet banking facility using NEFT/RTGS from another bank.