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/axis-bank_rewamp-banner_investment_public-provident-fund-(ppf)_mobile_360-x-400-pxbc75c439-3043-4b0a-a4c8-03fcf56468f8.webp "PPF - Public Provident Fund Account")
PPF - Public Provident Fund Account
If you're searching for a long-term investment strategy, consider the Public Provident Fund (PPF), which provides tax relief on the principal amount and accrues interest. The benefits of investing in a PPF include an attractive interest rate with minimal risk.
Additionally, it offers the convenience of loan options and partial withdrawals. The facility to check your balance, transfer funds, and access mini statements online allows you to manage your account conveniently anytime and anywhere.
The Public Provident Fund (PPF) is a government-backed small-savings scheme that offers long-term savings and tax-saving benefits. To invest in it, you need to open a Public Provident Fund account. PPF has a 15-year maturity period. Once the lock-in period is over, you can also extend the tenure in blocks of 5 years. You can even open a PPF account online.
Attractive interest rate
The interest payable on a PPF account is determined on a quarterly basis by the Ministry of Finance. Interest is calculated on the lowest closing balance between the 5th and the last day of each month. It is compounded annually and credited at the end of the financial year. The current rate of interest is 7.1% p.a.
Access investments online
- View PPF Account balance online
- Transfer funds from linked Savings Bank Account to PPF Account
- View, save and print Mini and Detailed statements
- View and print subscription receipts for all the online payments made to the PPF Account
- 24x7 accessibility through Internet Banking
Enjoy loan facilities and partial withdrawals
Features & Benefits
Attractive interest rate
The interest payable on a PPF account is determined on a quarterly basis by the Ministry of Finance.
Read MoreInvest with minimal risks
Secure, government-backed investment for long term goals.
Avail tax benefits
Investments made under the PPF scheme fall under the EEE (Exempt-Exempt-Exempt) tax regime — the principal amount, interest earned, and maturity proceeds are all tax-exempt under Section 80C of the Income Tax Act.
Enjoy loan facilities and partial withdrawals
- Loan facility can be availed any time between third financial year to sixth financial year i.e. from third financial year up to end of fifth financial year
How to apply?
- Online: PPF digital account opening will be processed basis OTP validation. Click here to proceed.
- Offline: To open your PPF account you will need to submit a filled in application form A along with your KYC documents and the initial contribution at an Axis Bank branch.
Visit any Axis Bank branch with the following documents:
- 01
1 passport size photograph
- 02
Address proof
- 03
Identity proof
- 04
Birth certificate in the case of minor
- 05
Initial contribution (of ₹500 minimum)
Eligibility
To enjoy low risk investments for long term, do check if you are eligible for Public Provident Fund Account as mentioned below:
- Any resident individual on his own behalf and on behalf of a minor of whom he is the guardian.
- No joint PPF accounts allowed.
- Non- resident Indians (NRIs) are not eligible to open an account under the Public Provident Fund Scheme. However, a resident who becomes an NRI during the 15 years tenure prescribed under Public Provident Fund Scheme may continue to subscribe to the fund until its maturity on a non- repatriation basis or closed the account.
- An individual can open only one PPF account and declare the same at the time of account opening.
Tax benefits of Public Provident Fund
- The biggest advantage of Public Provident Fund account is that it offers tax benefits at three stages, which very few investment products offer. The principal invested, interest earned, and maturity amount on the Public Provident Fund account are eligible for PPF tax exemption, which puts this savings-cum-investment option under the EEE (Exempt-Exempt-Exempt) status.
- Contributions made towards the PPF account of up to ₹1.5 lakh are tax-deductible under Section 80C of the Income Tax Act, 1961, while the interest paid out as well as the PPF maturity amount is exempt from taxes.
- This contribution can be made for oneself or for one’s child and still be eligible for the PPF tax exemption benefits. While the EEE status makes the PPF a popular tax-efficient investment scheme, the long-term lock-in period fixed and secured returns makes it suitable for planning for long-term goals such as retirement.
Offline withdrawal process
Here is how you can go about the offline process:
- Visit your bank, which is linked to your PPF account.
- Collect the Form C, fill it up correctly and submit it.
Importance of Public Provident Fund account
- A PPF account helps long-term investors invest for various purposes, such as retirement savings. Given the long tenure of the investment (15-year maturity period), the PPF account helps ensure a disciplined approach to savings.
- A PPF investment is safe because the Government of India guarantees the safety of this scheme. Since the interest rate is fixed quarterly, returns on the PPF are secured. This makes it a risk-free investment option for long-term investors seeking assured returns.
- You can avail a loan facility against your PPF account after the expiry of one year from the end of the year in which the initial subscription was made, but before the end of five years from the end of the year in which the initial subscription was made. The repayment of the loan starts from the first day of the month from when the loan was taken and can be repaid over a period of 36 months.
PPF account - Terms of subscription
Investment Amount
- Minimum Investment of ₹500 and maximum Investment of ₹1,50,000 per financial year (subject to change as per notification issued by Central Government).
- You can deposit the amount in one go or in different instalments.
- Instalments can be for a period of monthly, quarterly, half yearly or yearly.
- Amount deposited in excess of ₹1.5 lakhs shall neither be entitled to interest under PPF scheme nor be eligible for tax benefits.
Period of Investment
The original tenure of the PPF account is 15 years , which can be extended further in blocks of 5 years each for any number of blocks. The extension can be with or without contribution. Withdrawal from PPF account is allowed after completion of 5 years for the amount not exceeding 50% of the amount that stood to his credit at the end of the fourth year immediately preceding the year of withdrawal or at the end of the preceding year, whichever is lower.
- In the case of the death of a customer, their nominee /legal heir can close the account by submitting the required documents.
- Premature closure of PPF account is allowed on any of the following grounds provided that an account shall not be closed before the expiry of five years from the end of the year in which the account was opened.
- Treatment of life threatening disease of the account holder, his spouse or dependent children or parents.
- Higher education of the account holder or dependent children.
- On change in residency status of the account holder.
On such premature closure, interest in the account shall be allowed at a rate which shall be lower by 1% than the rate at which interest has been credited in the account.
Frequently Asked Questions
PPF or Public Provident Fund is a long-term fixed income savings scheme offered by the Government of India. It offers tax benefits as well as fixed and guaranteed returns. It is one of the tax-saving instruments under Section 80C of the old regime of Income Tax Act. The PPF tenure is 15 years and the account cannot be closed prematurely except on certain grounds. However, the subscriber or depositor is allowed to withdraw part of the money after five years. You can withdraw 50% of your balance as at the end of the preceding financial year. Any resident Indian can open a PPF account.
There is no limit on how many times you want to extend the tenure of your PPF account in periods of 5 years each. This can be done even without making any further contributions towards the investment as the existing amount will continue earning compound interest.
The interest rate on PPF is announced by the government every quarter. It is linked to the rates on government securities and changes accordingly. The interest on the PPF is calculated based on your balance in your account before the fifth of every month. So ideally, make your deposit before the fifth of the month to get maximum benefit. Any deposit made after that will not earn interest for that particular month.
PPF offers fixed and guaranteed returns and has a long-term maturity period. This makes it is a suitable savings tool for financial goals that have a longer time horizon. Hence, PPF is a must for your retirement portfolio. You can invest up to Rs 1,50,000 per year in PPF and get tax exemption on that. The interest earned on the deposit is not taxed. The entire amount can be withdrawn on maturity and is tax-free in the hands of the subscriber For self employed people, who don't get a salary and hence don't enjoy the benefits of Employee Provident Fund, PPF is an extremely useful tax-saving instrument.
If the PPF account holder passes away, the legal heir can claim the PPF amount of up to 1 lakh without a succession certificate by filling and submitting Form G. They can find and download this form on the website of their bank or collect fit at the post office where the PPF account was opened.
The minimum amount that must be invested in a PPF account is Rs 500 and the maximum is Rs 1, 50,000 in a year. On maturity, the account can be extended for a 5-year period. There is no limit to the number of times the account can be extended. An individual can have only one PPF account in their name. However you can open a PPF account in your minor child's name. When doing this please remember that the total investment in both PPF accounts should not exceed Rs 1,50,000 in a year. You can also invest in your PPF account online through internet banking!
The tenure of your Public Provident Fund is 15 years, after which you can extend the investment for a tenure of 5 years periodically. Therefore, you can extend the account after the 15-year tenure by another 5 years, l.e., 20 years, 25 years and so on.
Your PPF account will remain active as long as you continue to deposit a minimum amount of ₹500 in each financial year. In case you do not deposit this minimum amount, your account will be inactive, and there will be a penalty charge for each financial year that the account has been inactive. But if there is already some balance in your PPF account, it will continue accruing interest until maturity.
Yes, even if your PPF account is inactive, the existing amount in your account will continue earning interest until the scheme reaches maturity.
As per the PPF rules, you cannot have more than one PPF account in your name. However, you can increase the contribution amount each year to avail of better PPF benefits on maturity.
Yes, when you make a PPF contribution for yourself or on behalf of your child, contributions of up to 1.5 lakh will be eligible for tax deductions under Section 80C of the Income Tax Act when you file your tax returns. However, you can only claim the tax benefits as long as you are making the contributions.
At present, the PPF rules do not allow for an investment of more than 1.5 lakh for every financial year.
No, you need not withdraw the entire amount when your PPF account reaches maturity at the end of 15 years. Instead, you can simply extend the tenure by 5 years at a time until you want to close the account.
A PPF investment does not continue once the account holder passes away. Instead, either your legal heir or an appointed nominee will be given the amount already deposited in the account as no interest will accrue on the account's funds.
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