PPF Account Rules : Eligibility, Tenure, Deposits, and Limits

The Public Provident Fund (PPF) is one of the safest long-term investment options in India. Since it is backed by the Government of India, it offers guaranteed returns along with tax benefits. That’s why both salaried and self-employed people prefer it. But before you open a PPF account, it’s important to know the rules about who can open it, how long it runs, how much you can deposit, and the limits.

Quick Overview of PPF Account Rules

Who Can Open a PPF Account? (Eligibility)

• Residents only: Any Indian resident can open a PPF account. This includes salaried employees, self-employed professionals, business owners, and even students.
• Minors allowed: Parents or guardians can open a PPF account on behalf of their children. However, the combined deposit limit (parent + minor account) cannot exceed ₹1.5 lakh in a financial year.
• HUFs and NRIs excluded: Hindu Undivided Families (HUFs) are not eligible to open PPF accounts. Similarly, Non-Resident Indians (NRIs) cannot open a new account. If someone becomes an NRI during the account tenure, they can continue the account till maturity but cannot extend it.

Tip: If you’re planning long-term savings for your child’s education, opening a minor’s PPF account early can give a head start.

PPF Account Tenure

The default tenure of a PPF account is 15 years. This is counted from the end of the financial year in which the account is opened.

Example: If you open your account in August 2025, the 15-year period starts from March 31, 2026, and will mature on March 31, 2041.

PPF Extension Options

After 15 years, account holders get two choices:

1. Extension with contribution: You can extend in blocks of 5 years and continue making deposits.
2. Extension without contribution: You can let the account remain open without depositing further, and it will continue earning interest.

This flexibility makes PPF suitable for long-term goals like retirement, child’s education, or marriage.

PPF Deposits: Minimum & Maximum

The scheme is designed to be inclusive – whether you want to save small or large amounts.

• Minimum deposit: ₹500 per financial year.
• Maximum deposit: ₹1.5 lakh per financial year.
• Frequency: You can deposit in one lump sum or in instalments. A maximum of 12 deposits are allowed in a year.

Note: If you fail to deposit the minimum ₹500 in a year, the account will become inactive. To reactivate, you need to pay a penalty of ₹50 per year of default along with the minimum deposit.

PPF Deposit Limits for Minor Accounts

Many parents prefer to open PPF accounts for their children. But keep in mind:

• The combined annual deposit limit for parent and child’s account is still ₹1.5 lakh only.
• If you deposit ₹1.5 lakh in your own account, you cannot deposit in the minor’s account in the same year (and vice versa).

This rule often confuses investors, so it’s important to plan deposits carefully.

PPF Withdrawal Rules

Even though PPF is a long-term investment, partial liquidity is allowed.

• Partial withdrawals: Permitted from the 7th financial year onwards. The maximum amount you can withdraw is up to 50% of the balance at the end of the 4th year (or the preceding year, whichever is lower).
• Full withdrawal: Possible only at maturity (after 15 years).
• Premature closure: Allowed after 5 years, but only under specific conditions like higher education or medical emergencies. A 1% interest penalty applies.

PPF Loan Facility

One unique benefit of PPF is the loan against your balance.

• You can take a loan between the 3rd and 6th financial year.
• The maximum loan allowed is 25% of the balance at the end of the 2nd year preceding the loan year.
• The loan has to be repaid within 36 months, and the interest rate is just 1% higher than the prevailing PPF interest rate.

This makes PPF not only a savings option but also a low-cost borrowing option for emergencies.

Tax Benefits of PPF

PPF is one of the few investment instruments that enjoys EEE (Exempt-Exempt-Exempt) status:

1. Exempt at investment: Deposits are eligible for deduction under Section 80C (up to ₹1.5 lakh).
2. Exempt on interest: Interest earned is completely tax-free.
3. Exempt at withdrawal: Maturity proceeds are not taxable.

This makes it a favorite for tax-saving investors looking for safe, guaranteed returns.

PPF Key Rules at a Glance

• Only Indian residents can open a PPF account.
• Tenure: 15 years (extendable in 5-year blocks).
• Minimum deposit: ₹500/year; Maximum: ₹1.5 lakh/year.
• One account per person; joint accounts not allowed.
• Withdrawals allowed from 7th year; premature closure after 5 years (with conditions).
• Loan facility available from 3rd to 6th year.
• Enjoys EEE tax benefits.

FAQs on PPF Account Rules

Q1. Can I open more than one PPF account?
No, an individual can have only one PPF account. Joint accounts are also not permitted.

Q2. Can NRIs invest in PPF?
NRIs cannot open a new account. If an existing account holder becomes an NRI, they can continue till maturity but cannot extend it.

Q3. What happens if I don’t deposit the minimum ₹500 in a year?
Your account becomes inactive. To reactivate, you need to pay ₹50 per default year plus the minimum deposit.

Q4. Is the PPF interest rate fixed?
No, the government reviews and revises the PPF interest rate every quarter.

Q5. Can I transfer my PPF account?
Yes, you can transfer your PPF account from one bank or post office to another without losing benefits.

The Public Provident Fund continues to be one of the most reliable long-term savings schemes in India. Its combination of government backing, fixed tenure, flexible deposits, and tax benefits make it a smart choice for anyone looking to build wealth safely over time.

By understanding the rules around eligibility, tenure, deposits, and limits, you can make better decisions and maximize the benefits of your PPF account. Whether you are a first-time investor or someone planning for retirement, PPF provides the discipline of long-term savings along with peace of mind that your money is completely secure. When compared to riskier options like equities or market-linked funds, PPF is ideal for conservative investors who prioritize stability over high returns. It can also work as a balanced addition to your portfolio, ensuring both safety and tax efficiency. In short, PPF is not just a savings scheme, it’s a financial safety net for your future.