Public Provident Fund (PPF) is a tax saving cum investment scheme in India. It introduced in 1986 and it’s target to attract middle class and lower income class public for saving and investing by giving them high returns and tax relaxation for long term.

So let’s know about this scheme and find out how it is the best investment option for us.

Who can open a PPF Account–
 Individual who is Indian citizen can open this account.

Where one can open this account–
You can open PPF Account in Public Sector Banks or Private Banks as well as Post Office.

How much one can invest–
One can invest minimum of ₹500 to maximum ₹1,50,000 in a year. If you deposit more than ₹1.5 lac than the excessive money will not be eligible for tax saving and will not be consider for interest. You can deposit in installments or lumpsum.

What is tenure of this scheme–
The deposits are locked for 15 years as it’s tenure is 15 years. And you can increase it’s tenure by 1 or more block of 5 years.

What is interest rate–
Government of India announces the rate of interest for PPF account every quarter. As of 01.04.2020 the interest rate is 7.1%.

What is tax benefits–
Deposits are exempted to income tax, interest is also tax free and all the balance that accumulates over time is exempted from wealth tax. So your deposit, interest and matured amout all are tax free.

Document required for opening PPF account–
 • Form – A
 • Nomination Form
 • Passport size photos
 • ID proof
 • Address proof

Maturity Options–
 • Complete withdrawal
 • Extend the PPF account with no contribution 
 • Extend the PPF account with contribution

Some more features of PPF–
 • Loan facility available from 3rd financial year up to 6th financial year.
 • Loan interest rate is 2% more than the current interest rate and repayment time is 36 months.
 • The interest earned on the PPF subscription is compounded annually.
 • Pre-mature withdrawals can be made from the start of the seventh financial year. 
 • Nomination facility is available in the name of one or more persons. The shares of nominees may also be defined by the subscriber.
 • If any contribution of minimum amount in any year is not invested, then the account will be deactivated. 
 • To activate the bearer needs to pay ₹50 as penalty for each inactive year.
 • Premature closure of PPF account is permitted after completion of 5 years for medical treatment of family members and for higher education of PPF account holder.

So it’s all about PPF Account. I hope you learnt well about PPF and ready to open an account. It’s a great way to invest money for long term. Just invest your extra money and get good returns.

If you have any queries then ask you questions in comment section.

Happy Investing.