The Public Provident Fund (PPF) is one of the most trusted saving options in India. Since it is backed by the Government of India, it gives investors a sense of safety along with steady returns and valuable tax benefits. That’s why both salaried people and self-employed professionals prefer it as a long-term plan.
In this guide, we’ll cover everything about PPF eligibility, rules, deposits, withdrawals, interest rates, tax benefits, account closure, and extension along with real-life examples and clear FAQs so you can make confident decisions.
The Public Provident Fund (PPF) is a long-term savings scheme started in 1968 by the Government of India. It is designed to encourage small savings and provide safe, guaranteed returns along with tax benefits.
Here’s a quick reference guide to the most important rules and features of the Public Provident Fund (PPF). This summary makes it easier to remember key points without going into too much detail.
| Feature | Details |
|---|---|
| Eligibility | Available for Indian residents (adults & minors). Not available for NRIs or HUFs. |
| Tenure | 15 years (extendable in blocks of 5 years after maturity). |
| Deposits | Minimum ₹500 and maximum ₹1.5 lakh per financial year. Deposits allowed in lump sum or up to 12 instalments. |
| Interest Rate | Decided by the government every quarter. Currently around 7% (varies). |
| Withdrawals | Partial withdrawals allowed from 7th financial year; full withdrawal only at maturity. |
| Premature Closure | Allowed after 5 years under special conditions (education, medical treatment, NRI status) with 1% interest penalty. |
| Loan Facility | Available between 3rd and 6th years, up to 25% of the balance at end of 2nd year. |
| Tax Benefits | EEE(Exempt-Exempt-Exempt) status – Investment, interest, and maturity amount are all tax-free. Eligible for deduction under Section 80C. |
| Account Limit | Only one PPF account per individual |
| Inactive Account | Becomes inactive if annual deposit not made; revival requires ₹500 + ₹50 penalty per missed year |
The Public Provident Fund (PPF) is meant for Indian residents, but not everyone can open an account. Here’s a clear breakdown of who is eligible and who is not:
A Public Provident Fund (PPF) account is designed for long-term savings. It comes with a fixed lock-in period of 15 years, but also offers flexibility once it matures.
Example: Prithvi opened his PPF account in August 2025. The lock-in will be counted from March 31, 2026, and his account will mature on March 31, 2041 (15 years later).
After the initial 15 years, you can extend your PPF account in blocks of 5 years. There are two extension choices:
Example: After completing 15 years in March 2041, Prithvi chose to extend his PPF with contributions, depositing ₹1.5 lakh annually. This helped him build a larger retirement fund.
For Example: Prithvi extended his account twice – first with contributions from 2041–2046, and then without contributions from 2046–2051. This gave him both growth and flexibility as he approached retirement.
One of the reasons the Public Provident Fund (PPF) is popular is its flexibility in deposits. You don’t need a large amount to maintain the account, but you also have the option to invest up to the maximum allowed limit every year.
Example: Prithvi deposited only ₹500 in one year to keep his account active when he had tight finances. In another year, he deposited the maximum ₹1.5 lakh to get full tax benefits under Section 80C.
Example: To stay disciplined, Prithvi decided to deposit ₹12,500 every month before the 5th. This way, by the end of the financial year, his total investment reached ₹1.5 lakh, and every instalment earned interest from that month onward.
If you fail to deposit at least ₹500 in a financial year, your PPF account will be marked as inactive from the next financial year. Here’s everything you need to know:
Example: Prithvi forgot to deposit in FY 2026–27. From 1st April 2027, his account became inactive. His balance of ₹2,50,000 kept earning interest, but he could not deposit new money or claim tax benefits. In FY 2030–31, he decided to revive it by paying ₹200 penalty (₹50 × 4 years) plus ₹2,000 as missed deposits (₹500 × 4 years). After that, the account will be fully active again.
One of the most important things to understand about the Public Provident Fund (PPF) is how interest is calculated. Unlike a fixed deposit where interest is applied on the full deposit from the day of investment, PPF has a special rule for interest calculation.
Prithvi invested ₹1.5 lakh in his PPF account:
Prithvi deposited ₹50,000 on 3rd June. Since it was before the 5th, the amount earned interest from June itself. But if he deposited the same ₹50,000 on 7th June, interest would start only from July.
The Public Provident Fund (PPF) is a long-term investment with a 15-year lock-in. Still, there are certain situations where withdrawals are allowed. Let’s look at the rules and examples.
Example: Prithvi opened his PPF account in August 2025. His account will mature on 31st March 2041, when he can withdraw the full amount or extend it for another 5 years.
Example: Prithvi opened his account in FY 2025–26. By FY 2032–33 (7th year), his balance was ₹6,00,000. The balance at the end of FY 2029–30 was ₹4,00,000. He could withdraw up to ₹2,00,000 (50% of ₹4,00,000).
Example: Prithvi needed funds for his daughter’s higher studies in FY 2031–32. Since 6 years had passed, he closed the account prematurely. His total interest earned was reduced by 1% as per rules.
The Public Provident Fund (PPF) not only helps you save for the long term but also gives you access to short-term liquidity through a loan facility. This can be very useful during financial emergencies.
Example: Prithvi opened his PPF account in FY 2025–26. He became eligible for a loan from FY 2027–28 and remained eligible until FY 2030–31. After that, loan facility was no longer available.
Example: Prithvi applied for a loan in FY 2029–30. His balance at the end of FY 2027–28 was ₹2,00,000. He could take a maximum loan of ₹50,000 (25% of ₹2,00,000).
Example: Prithvi borrowed ₹40,000 from his PPF in 2029 at an interest rate of 7.1% + 1% = 8.1%. He repaid the loan in 24 months and paid interest on the outstanding balance as per rules.
One of the biggest reasons people invest in the Public Provident Fund (PPF) is the tax benefit it offers. PPF is among the few instruments that enjoy EEE (Exempt-Exempt-Exempt) status – meaning your investment, interest earned, and maturity proceeds are all tax-free.
Example: Prithvi earns ₹10,00,000 annually. By investing ₹1,50,000 in PPF during FY 2025–26, his taxable income reduces to ₹8,50,000. This directly cuts down his tax outgo depending on his slab.
Example: Prithvi invested ₹1,20,000 in PPF for FY 2025–26. At an interest rate of 7.1%, he earned ₹8,520 in tax-free interest for the year. This amount compounded every year without any tax deduction.
Example: Prithvi invested the maximum ₹1.5 lakh every year for 15 years. At maturity, his corpus grew to around ₹40 lakh (at 7.1% assumed rate). The entire amount, including interest, was tax-free.
Example: Prithvi deposited ₹1.5 lakh in his own account and ₹50,000 in his child’s account. Though his tax benefit was capped at ₹1.5 lakh, the child’s account balance also grew tax-free – helping the family build a larger safe corpus.
Opening a Public Provident Fund (PPF) account is simple, but you need to provide a few documents for verification. Whether you open it at a bank or a post office, the list is largely the same with slight differences.
Example: Prithvi decided to open a PPF account in a nearby bank. He submitted his Aadhaar (ID + address proof), PAN card, 2 photographs, and signed the bank’s PPF account opening form. Later, when his friend opened it in a post office, she was also asked to provide her Post Office Savings Account number for linking.
Normally, the Public Provident Fund (PPF) has a 15-year lock-in, but there are certain cases where you can access your money earlier. These include partial withdrawals after 7 years and premature closure after 5 years under special conditions.
Example: Prithvi opened his PPF account in FY 2025–26. From FY 2032–33 (the 7th financial year), he became eligible for partial withdrawal. If his balance was ₹6,00,000 in FY 2031–32 and ₹4,00,000 in FY 2029–30, the withdrawal limit was ₹2,00,000 (50% of the lower balance).
Example: In FY 2031–32, Prithvi needed funds for his daughter’s higher education. Since 6 years had passed since opening his account, he applied for premature closure. His request was approved, but the total interest earned was reduced by 1% as per the rules.
One unique feature of the Public Provident Fund (PPF) is that you can choose how to deposit – either in a lump sum once a year or in monthly instalments. Both options are allowed, but the timing of deposits directly affects how much interest you earn.
Example: Prithvi deposited ₹1.5 lakh in one go on 2nd April 2025. Since it was before the 5th, the entire amount earned interest for the full financial year.
Example: Prithvi deposited ₹12,500 every month before the 5th. By the end of the year, his total deposits were ₹1.5 lakh, and each instalment earned interest from its respective month. If he had deposited after the 5th, he would have lost one month’s interest on each instalment.
Tip: If you have surplus funds at the beginning of the year, choose lump sum. If you prefer spreading out savings, make sure deposits are done before the 5th of each month.
A Public Provident Fund (PPF) account can also be opened for a minor by a parent or guardian. However, the combined deposit rules often confuse investors. Here’s what you should know.
Example: Prithvi deposited ₹1.5 lakh in his own PPF account in FY 2026–27. He also deposited ₹50,000 in his daughter’s PPF account. As per rules, the combined limit is ₹1.5 lakh, so the extra ₹50,000 did not earn any interest or tax benefit.
The Public Provident Fund (PPF) is available only to Indian residents. Non-Resident Indians (NRIs) are restricted under the scheme, but there are specific rules for those who opened their account before moving abroad.
Example: Prithvi opened a PPF account in 2025 while he was living in India. In 2030, he moved abroad and became an NRI. He continued to maintain his PPF account by contributing from his NRO account until 2041. At maturity, he had to withdraw the full amount as extension was not allowed.
The Public Provident Fund (PPF) allows account holders to nominate one or more people who can claim the account balance in case of death. Understanding nomination rules is important to ensure smooth transfer of funds to your family.
Example: Mr. X opened his PPF account in 2025 and nominated his wife as the beneficiary. In 2030, after having two children, he updated the nomination to include them with equal shares of 33.3% each.
Example: After Mr. X unfortunate death, his nominee (wife) submitted Form G along with his death certificate and her Aadhaar card. The bank closed the account and transferred the full balance to her account.
You can open a Public Provident Fund (PPF) account either through a bank or a post office. The process is simple and almost identical in both cases, though banks also offer online options.
Example: Prithvi wanted to open a PPF account. Since he already had a savings account in SBI, he applied online through internet banking by submitting his Aadhaar and PAN details digitally. His account was opened instantly, and he started depositing online from his savings account.
Before choosing where to invest, it’s important to compare the Public Provident Fund (PPF) with other common savings and tax-saving instruments. Each option has its own benefits and limitations..
| Investment | Lock-in Period | Returns | Tax Treatment | Risk Level |
|---|---|---|---|---|
| PPF | 15 years | ~7.1% (govt fixed) | EEE – Fully tax-free | Very Low |
| FD | 7 days – 10 years | ~6–7% | Interest fully taxable | Low |
| ELSS | 3 years | Market-linked (10–12% avg.) | Taxed at 10% on gains | Medium to High |
| NPS | Till 60 years | Market-linked | Partial tax-free + annuity taxable | Medium |
| NSC | 5 years | ~7.7% | Interest taxable (but reinvested counts for 80C) | Low |
A Public Provident Fund (PPF) account has a fixed tenure of 15 years. Once it matures, you can choose to withdraw, close, or extend the account. Let’s look at the rules in detail.
Example: Prithvi opened his PPF account in August 2025. His account matured on 31st March 2041. He applied for closure and received the full maturity amount of around ₹40 lakh, completely tax-free.
Example: Prithvi extended his account for 5 years with contributions after 2041. He continued depositing ₹1.5 lakh annually and also withdrew ₹2 lakh once during each year when required.
Example: After 2046, Prithvi extended his account without further contributions. He did not deposit fresh money but continued earning interest on his existing balance and withdrew funds as needed.
Despite being one of the most popular savings schemes, the Public Provident Fund (PPF) is often misunderstood. Here are some of the most common myths and the actual facts.
Example: Prithvi wanted to open one account in SBI and another in the post office. He later found out it wasn’t possible since only one account is allowed per person.
Example: Prithvi deposited ₹2 lakh in FY 2027–28, but only ₹1.5 lakh was eligible. The extra ₹50,000 earned no interest and gave no tax benefit.
Example: Prithvi forgot to deposit for 3 years. He revived his account by paying ₹150 penalty and ₹1,500 for missed deposits.
The Public Provident Fund (PPF) is considered one of the safest and most reliable investment options in India. However, like any financial product, it has both strengths and limitations. Let’s look at the pros and cons clearly.
Here are answers to some of the most frequently asked questions about the Public Provident Fund (PPF). These cover eligibility, deposits, withdrawals, tax benefits, and rules.
Any Indian resident (adult or minor) can open a PPF account. NRIs and HUFs are not eligible.
The lock-in period is 15 years, counted from the end of the financial year in which the account was opened.
You must deposit at least ₹500 per year, and the maximum limit is ₹1.5 lakh per year.
No, only one account is allowed per individual. Joint accounts are also not permitted.
No, the interest rate is set by the government and reviewed every quarter. Currently, it is around 7.1%.
Yes, partial withdrawals are allowed from the 7th year. Full withdrawal is possible only at maturity, except in cases of premature closure (education or medical reasons).
Your account becomes inactive. It can be revived by paying ₹500 + ₹50 penalty for each missed year.
NRIs cannot open a new account. If you become an NRI after opening, you can continue the account until maturity but cannot extend it further.
PPF enjoys EEE status. Investment is deductible under Section 80C (up to ₹1.5 lakh), interest earned is tax-free, and the maturity amount is exempt from tax.
Yes, between the 3rd and 6th year, you can take a loan of up to 25% of the balance at the end of the 2nd preceding year.
Yes, you can transfer your PPF account from one bank or post office to another without losing benefits.
The account is closed, and the balance is paid to the nominee/legal heirs. It cannot be continued.
Yes, you can extend in blocks of 5 years, with or without contributions.
Premature closure is allowed after 5 years under specific conditions (higher education, medical emergency) with a 1% reduction in the interest rate earned.
The Public Provident Fund (PPF) is one of the most trusted saving options in India. Since it is backed by the Government of India, it gives investors a sense of safety along with steady returns and valuable tax benefits. That’s why both salaried people and self-employed professionals prefer it as a long-term plan.
In this guide, we’ll cover everything about PPF eligibility, rules, deposits, withdrawals, interest rates, tax benefits, account closure, and extension along with real-life examples and clear FAQs so you can make confident decisions.
The Public Provident Fund (PPF) is a long-term savings scheme started in 1968 by the Government of India. It is designed to encourage small savings and provide safe, guaranteed returns along with tax benefits.
Here’s a quick reference guide to the most important rules and features of the Public Provident Fund (PPF). This summary makes it easier to remember key points without going into too much detail.
| Feature | Details |
|---|---|
| Eligibility | Available for Indian residents (adults & minors). Not available for NRIs or HUFs. |
| Tenure | 15 years (extendable in blocks of 5 years after maturity). |
| Deposits | Minimum ₹500 and maximum ₹1.5 lakh per financial year. Deposits allowed in lump sum or up to 12 instalments. |
| Interest Rate | Decided by the government every quarter. Currently around 7% (varies). |
| Withdrawals | Partial withdrawals allowed from 7th financial year; full withdrawal only at maturity. |
| Premature Closure | Allowed after 5 years under special conditions (education, medical treatment, NRI status) with 1% interest penalty. |
| Loan Facility | Available between 3rd and 6th years, up to 25% of the balance at end of 2nd year. |
| Tax Benefits | EEE(Exempt-Exempt-Exempt) status – Investment, interest, and maturity amount are all tax-free. Eligible for deduction under Section 80C. |
| Account Limit | Only one PPF account per individual |
| Inactive Account | Becomes inactive if annual deposit not made; revival requires ₹500 + ₹50 penalty per missed year |
The Public Provident Fund (PPF) is meant for Indian residents, but not everyone can open an account. Here’s a clear breakdown of who is eligible and who is not:
A Public Provident Fund (PPF) account is designed for long-term savings. It comes with a fixed lock-in period of 15 years, but also offers flexibility once it matures.
Example: Prithvi opened his PPF account in August 2025. The lock-in will be counted from March 31, 2026, and his account will mature on March 31, 2041 (15 years later).
After the initial 15 years, you can extend your PPF account in blocks of 5 years. There are two extension choices:
Example: After completing 15 years in March 2041, Prithvi chose to extend his PPF with contributions, depositing ₹1.5 lakh annually. This helped him build a larger retirement fund.
For Example: Prithvi extended his account twice – first with contributions from 2041–2046, and then without contributions from 2046–2051. This gave him both growth and flexibility as he approached retirement.
One of the reasons the Public Provident Fund (PPF) is popular is its flexibility in deposits. You don’t need a large amount to maintain the account, but you also have the option to invest up to the maximum allowed limit every year.
Example: Prithvi deposited only ₹500 in one year to keep his account active when he had tight finances. In another year, he deposited the maximum ₹1.5 lakh to get full tax benefits under Section 80C.
Example: To stay disciplined, Prithvi decided to deposit ₹12,500 every month before the 5th. This way, by the end of the financial year, his total investment reached ₹1.5 lakh, and every instalment earned interest from that month onward.
If you fail to deposit at least ₹500 in a financial year, your PPF account will be marked as inactive from the next financial year. Here’s everything you need to know:
Example: Prithvi forgot to deposit in FY 2026–27. From 1st April 2027, his account became inactive. His balance of ₹2,50,000 kept earning interest, but he could not deposit new money or claim tax benefits. In FY 2030–31, he decided to revive it by paying ₹200 penalty (₹50 × 4 years) plus ₹2,000 as missed deposits (₹500 × 4 years). After that, the account will be fully active again.
One of the most important things to understand about the Public Provident Fund (PPF) is how interest is calculated. Unlike a fixed deposit where interest is applied on the full deposit from the day of investment, PPF has a special rule for interest calculation.
Prithvi invested ₹1.5 lakh in his PPF account:
Prithvi deposited ₹50,000 on 3rd June. Since it was before the 5th, the amount earned interest from June itself. But if he deposited the same ₹50,000 on 7th June, interest would start only from July.
The Public Provident Fund (PPF) is a long-term investment with a 15-year lock-in. Still, there are certain situations where withdrawals are allowed. Let’s look at the rules and examples.
Example: Prithvi opened his PPF account in August 2025. His account will mature on 31st March 2041, when he can withdraw the full amount or extend it for another 5 years.
Example: Prithvi opened his account in FY 2025–26. By FY 2032–33 (7th year), his balance was ₹6,00,000. The balance at the end of FY 2029–30 was ₹4,00,000. He could withdraw up to ₹2,00,000 (50% of ₹4,00,000).
Example: Prithvi needed funds for his daughter’s higher studies in FY 2031–32. Since 6 years had passed, he closed the account prematurely. His total interest earned was reduced by 1% as per rules.
The Public Provident Fund (PPF) not only helps you save for the long term but also gives you access to short-term liquidity through a loan facility. This can be very useful during financial emergencies.
Example: Prithvi opened his PPF account in FY 2025–26. He became eligible for a loan from FY 2027–28 and remained eligible until FY 2030–31. After that, loan facility was no longer available.
Example: Prithvi applied for a loan in FY 2029–30. His balance at the end of FY 2027–28 was ₹2,00,000. He could take a maximum loan of ₹50,000 (25% of ₹2,00,000).
Example: Prithvi borrowed ₹40,000 from his PPF in 2029 at an interest rate of 7.1% + 1% = 8.1%. He repaid the loan in 24 months and paid interest on the outstanding balance as per rules.
One of the biggest reasons people invest in the Public Provident Fund (PPF) is the tax benefit it offers. PPF is among the few instruments that enjoy EEE (Exempt-Exempt-Exempt) status – meaning your investment, interest earned, and maturity proceeds are all tax-free.
Example: Prithvi earns ₹10,00,000 annually. By investing ₹1,50,000 in PPF during FY 2025–26, his taxable income reduces to ₹8,50,000. This directly cuts down his tax outgo depending on his slab.
Example: Prithvi invested ₹1,20,000 in PPF for FY 2025–26. At an interest rate of 7.1%, he earned ₹8,520 in tax-free interest for the year. This amount compounded every year without any tax deduction.
Example: Prithvi invested the maximum ₹1.5 lakh every year for 15 years. At maturity, his corpus grew to around ₹40 lakh (at 7.1% assumed rate). The entire amount, including interest, was tax-free.
Example: Prithvi deposited ₹1.5 lakh in his own account and ₹50,000 in his child’s account. Though his tax benefit was capped at ₹1.5 lakh, the child’s account balance also grew tax-free – helping the family build a larger safe corpus.
Opening a Public Provident Fund (PPF) account is simple, but you need to provide a few documents for verification. Whether you open it at a bank or a post office, the list is largely the same with slight differences.
Example: Prithvi decided to open a PPF account in a nearby bank. He submitted his Aadhaar (ID + address proof), PAN card, 2 photographs, and signed the bank’s PPF account opening form. Later, when his friend opened it in a post office, she was also asked to provide her Post Office Savings Account number for linking.
Normally, the Public Provident Fund (PPF) has a 15-year lock-in, but there are certain cases where you can access your money earlier. These include partial withdrawals after 7 years and premature closure after 5 years under special conditions.
Example: Prithvi opened his PPF account in FY 2025–26. From FY 2032–33 (the 7th financial year), he became eligible for partial withdrawal. If his balance was ₹6,00,000 in FY 2031–32 and ₹4,00,000 in FY 2029–30, the withdrawal limit was ₹2,00,000 (50% of the lower balance).
Example: In FY 2031–32, Prithvi needed funds for his daughter’s higher education. Since 6 years had passed since opening his account, he applied for premature closure. His request was approved, but the total interest earned was reduced by 1% as per the rules.
One unique feature of the Public Provident Fund (PPF) is that you can choose how to deposit – either in a lump sum once a year or in monthly instalments. Both options are allowed, but the timing of deposits directly affects how much interest you earn.
Example: Prithvi deposited ₹1.5 lakh in one go on 2nd April 2025. Since it was before the 5th, the entire amount earned interest for the full financial year.
Example: Prithvi deposited ₹12,500 every month before the 5th. By the end of the year, his total deposits were ₹1.5 lakh, and each instalment earned interest from its respective month. If he had deposited after the 5th, he would have lost one month’s interest on each instalment.
Tip: If you have surplus funds at the beginning of the year, choose lump sum. If you prefer spreading out savings, make sure deposits are done before the 5th of each month.
A Public Provident Fund (PPF) account can also be opened for a minor by a parent or guardian. However, the combined deposit rules often confuse investors. Here’s what you should know.
Example: Prithvi deposited ₹1.5 lakh in his own PPF account in FY 2026–27. He also deposited ₹50,000 in his daughter’s PPF account. As per rules, the combined limit is ₹1.5 lakh, so the extra ₹50,000 did not earn any interest or tax benefit.
The Public Provident Fund (PPF) is available only to Indian residents. Non-Resident Indians (NRIs) are restricted under the scheme, but there are specific rules for those who opened their account before moving abroad.
Example: Prithvi opened a PPF account in 2025 while he was living in India. In 2030, he moved abroad and became an NRI. He continued to maintain his PPF account by contributing from his NRO account until 2041. At maturity, he had to withdraw the full amount as extension was not allowed.
The Public Provident Fund (PPF) allows account holders to nominate one or more people who can claim the account balance in case of death. Understanding nomination rules is important to ensure smooth transfer of funds to your family.
Example: Mr. X opened his PPF account in 2025 and nominated his wife as the beneficiary. In 2030, after having two children, he updated the nomination to include them with equal shares of 33.3% each.
Example: After Mr. X unfortunate death, his nominee (wife) submitted Form G along with his death certificate and her Aadhaar card. The bank closed the account and transferred the full balance to her account.
You can open a Public Provident Fund (PPF) account either through a bank or a post office. The process is simple and almost identical in both cases, though banks also offer online options.
Example: Prithvi wanted to open a PPF account. Since he already had a savings account in SBI, he applied online through internet banking by submitting his Aadhaar and PAN details digitally. His account was opened instantly, and he started depositing online from his savings account.
Before choosing where to invest, it’s important to compare the Public Provident Fund (PPF) with other common savings and tax-saving instruments. Each option has its own benefits and limitations..
| Investment | Lock-in Period | Returns | Tax Treatment | Risk Level |
|---|---|---|---|---|
| PPF | 15 years | ~7.1% (govt fixed) | EEE – Fully tax-free | Very Low |
| FD | 7 days – 10 years | ~6–7% | Interest fully taxable | Low |
| ELSS | 3 years | Market-linked (10–12% avg.) | Taxed at 10% on gains | Medium to High |
| NPS | Till 60 years | Market-linked | Partial tax-free + annuity taxable | Medium |
| NSC | 5 years | ~7.7% | Interest taxable (but reinvested counts for 80C) | Low |
A Public Provident Fund (PPF) account has a fixed tenure of 15 years. Once it matures, you can choose to withdraw, close, or extend the account. Let’s look at the rules in detail.
Example: Prithvi opened his PPF account in August 2025. His account matured on 31st March 2041. He applied for closure and received the full maturity amount of around ₹40 lakh, completely tax-free.
Example: Prithvi extended his account for 5 years with contributions after 2041. He continued depositing ₹1.5 lakh annually and also withdrew ₹2 lakh once during each year when required.
Example: After 2046, Prithvi extended his account without further contributions. He did not deposit fresh money but continued earning interest on his existing balance and withdrew funds as needed.
Despite being one of the most popular savings schemes, the Public Provident Fund (PPF) is often misunderstood. Here are some of the most common myths and the actual facts.
Example: Prithvi wanted to open one account in SBI and another in the post office. He later found out it wasn’t possible since only one account is allowed per person.
Example: Prithvi deposited ₹2 lakh in FY 2027–28, but only ₹1.5 lakh was eligible. The extra ₹50,000 earned no interest and gave no tax benefit.
Example: Prithvi forgot to deposit for 3 years. He revived his account by paying ₹150 penalty and ₹1,500 for missed deposits.
The Public Provident Fund (PPF) is considered one of the safest and most reliable investment options in India. However, like any financial product, it has both strengths and limitations. Let’s look at the pros and cons clearly.
Here are answers to some of the most frequently asked questions about the Public Provident Fund (PPF). These cover eligibility, deposits, withdrawals, tax benefits, and rules.
Any Indian resident (adult or minor) can open a PPF account. NRIs and HUFs are not eligible.
The lock-in period is 15 years, counted from the end of the financial year in which the account was opened.
You must deposit at least ₹500 per year, and the maximum limit is ₹1.5 lakh per year.
No, only one account is allowed per individual. Joint accounts are also not permitted.
No, the interest rate is set by the government and reviewed every quarter. Currently, it is around 7.1%.
Yes, partial withdrawals are allowed from the 7th year. Full withdrawal is possible only at maturity, except in cases of premature closure (education or medical reasons).
Your account becomes inactive. It can be revived by paying ₹500 + ₹50 penalty for each missed year.
NRIs cannot open a new account. If you become an NRI after opening, you can continue the account until maturity but cannot extend it further.
PPF enjoys EEE status. Investment is deductible under Section 80C (up to ₹1.5 lakh), interest earned is tax-free, and the maturity amount is exempt from tax.
Yes, between the 3rd and 6th year, you can take a loan of up to 25% of the balance at the end of the 2nd preceding year.
Yes, you can transfer your PPF account from one bank or post office to another without losing benefits.
The account is closed, and the balance is paid to the nominee/legal heirs. It cannot be continued.
Yes, you can extend in blocks of 5 years, with or without contributions.
Premature closure is allowed after 5 years under specific conditions (higher education, medical emergency) with a 1% reduction in the interest rate earned.
