Public Provident Fund Scheme
Learn everything about the Public Provident Fund (PPF) – India’s safest long‑term savings and investment scheme with guaranteed returns, attractive PPF interest rates, and triple tax benefits under Section 80C.
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Public Provident Fund (PPF): Public Provident Fund (PPF) is one of the most popular long‑term savings and investment schemes in India. Launched by the Government of India in 1968, PPF was designed to encourage small savings while providing guaranteed returns with strong tax benefits.
Backed by the central government, PPF is considered one of the safest investment options for individuals who want low‑risk, tax‑efficient, and long‑term financial planning.
Public Provident Fund Scheme Details
Minimum and Maximum Investment
Minimum deposit: ₹500 per year
Maximum deposit: ₹1.5 lakh per financial year
Contributions can be made either as a lump sum or in up to 12 installments in a year
At least ₹500 must be deposited annually; otherwise, the account becomes inactive
Tenure and Account Extension
Lock‑in period: 15 years (fixed)
On maturity, you can either withdraw the entire amount or extend the account in blocks of 5 years
Extension is possible with or without new contributions (requires Form H submission within one year of maturity)
Public Provident Fund Scheme Interest Rate
Current PPF interest rate: 7.1% per annum (Q2 FY 2025‑26)
Interest is compounded annually and credited on 31st March every year
The Government of India reviews the interest rate every quarter
Public Provident Fund PPF Tax Benefits
One of the biggest reasons for PPF’s popularity is the Exempt‑Exempt‑Exempt (EEE) tax benefit:
Investment: Deposits qualify for tax deduction under Section 80C, up to ₹1.5 lakh annually.
Interest: Entire interest earned is completely tax‑free.
Maturity Value: Both investment and returns are 100% tax‑exempt at maturity.
This makes PPF one of the most tax‑efficient and risk‑free investment schemes in India.
Public Provident Fund Loans, Withdrawals & Closure
Public Provident Fund Loan Facility
Available from 3rd to 5th financial year
You can borrow up to 25% of the balance at the end of the 2nd year before the loan request
A second loan is allowed only after the first one is fully repaid
Public Provident Fund Partial Withdrawals
Permitted from the 7th financial year onwards
Maximum 50% of balance can be withdrawn, calculated from the lower of:
Balance at the end of 4th financial year preceding withdrawal, OR
Balance at the end of the previous year
Public Provident Fund Premature Closure
Allowed only after 5 years under special conditions:
Medical emergencies (serious illness)
Higher education expenses
Subject to a small penalty or reduced interest rate
Public Provident Fund Eligibility
Who Can Open a PPF Account?
Only resident Indian individuals are eligible
Joint accounts and HUFs (Hindu Undivided Families) are not permitted
Parents/guardians can open a PPF account for minors (but the combined deposit limit for parent + minor is ₹1.5 lakh per year)
NRIs cannot open new accounts; however, if they already hold a PPF account before becoming an NRI, it can be continued until maturity (but cannot be extended further)
How to Open and Manage a PPF Account
You can open a PPF account in two ways:
Offline Method
Visit a post office or authorised nationalised or private sector bank branch
Submit KYC documents like Aadhaar, PAN, proof of address, photographs, and nomination form
You will get a PPF passbook to record transactions
Online / eKYC Method
From July 2025, PPF accounts can also be opened online via Aadhaar‑based biometric eKYC
Deposits, withdrawals, and account statements can be managed digitally
Why Should You Invest in PPF?
Government‑backed security ensuring zero risk
Guaranteed and fixed returns
EEE tax benefit makes it highly tax‑efficient
Long‑term wealth creation through power of compounding
Flexible contributions between ₹500 to ₹1.5 lakh annually
Loan, withdrawal, and premature closure options for emergencies
Perfect for retirement planning and securing a child’s future
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Frequently Asked Questions
You need to deposit at least ₹500 per year to keep the account active. The maximum annual deposit allowed in a PPF account is ₹1.5 lakh per financial year.
As of Q2 FY 2025‑26, the PPF interest rate is 7.1% per annum, compounded annually and credited on March 31. The rate is reviewed every quarter by the Government.
The maturity period of PPF is 15 years. After that, you can either withdraw the full amount or extend the account in blocks of 5 years with or without further contributions.
Yes, partial withdrawals are allowed from the 7th financial year onwards. You can withdraw up to 50% of the balance, subject to certain rules.
PPF can be closed prematurely after 5 years, only under special conditions such as medical emergencies or higher education of self/dependents. A small penalty in the form of reduced interest may apply.
If you fail to deposit at least ₹500 in a financial year, your PPF account becomes inactive. You can reactivate it by paying a penalty and making the minimum deposit.