PPF - Open Public Provident Fund Account

The Public Provident Fund Account is a government-backed, small savings scheme that offers exceptional long-term benefits to investors. With a 15-year maturity period, the PPF Account serves as an ideal investment vehicle for those seeking assured returns coupled with tax advantages. You can open a PPF account at authorised banks or post offices, making it easily accessible to all resident Indians.

Features and Benefits
How to Apply
Eligibility
Terms of Subscription
FAQs

PPF Account Features and Benefits

Attractive interest rate

The PPF Account currently offers a competitive interest rate of 7.1% per annum, which the government revises quarterly. This rate, compounded annually, helps your corpus grow substantially over the 15-year tenure.

Invest with minimal risks

The Government of India backs your investment and carries a sovereign guarantee, ensuring complete protection of your principal amount and interest earnings.

Avail tax benefits

The PPF Account enjoys an EEE (Exempt-Exempt-Exempt) status, meaning it is tax-exempt at all three stages: investment, interest accrual, and maturity. Contributions up to ₹1.5 lakh annually qualify for tax deduction under Section 80C.

Access investments online

Modern banking allows you to create a PPF Account online and manage it digitally. You can check balances, transfer funds, and access mini statements anytime.

Enjoy loan facilities and partial withdrawals

After three years, you can take out loans against your PPF Account balance. Additionally, partial coverage offers financial flexibility during emergencies.

Guaranteed returns

PPF gives you a fixed return at the interest rate fixed by the government. Hence, your money stays safe..

Long-term savings

Since the investment period is 15 years, PPF aids in building a good and long-term corpus for the future.

Minimum and maximum deposits

You can start a PPF with a minimum deposit of ₹500 and continue the investment every year to keep the account active. A maximum investment of ₹1.5 lakhs is allowed every year.

Transferability

You can shift your PPF account from one bank or post office to another quickly, avoiding a long process without hassle.

How to open a PPF Account in 5 steps

1.You can open a PPF Account in any nearby bank or post office. You can also apply online via net banking.
2. Fill the PPF application form correctly. PPF Application form is available on Axis Bank Website under downloads form option.
3.Submit KYC documents like PAN card, Aadhaar card, and any other proof needed.
4. Decide on the amount you want to deposit. Provide bank details for the auto-debit facility.
5. Your account is opened with funds being deducted from the provided Bank Account.

Eligibility

Eligibility criteria to open a PPF Account

To enjoy low risk investments for long term, do check if you are eligible for Public Provident Fund Account as mentioned below:

PPF accounts can be opened only by an Indian citizen. Both adults and minors can have a PPF account. However, each person is entitled to open only one account in their name.
For a minor, the parents or guardians can open a PPF account.
PPF accounts are not available for Non-Resident Indians (NRIs) and Hindu Undivided Families (HUFs).
The maturity period of a PPF account is 15 years.

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 a Public Provident Fund Account

The PPF Account serves as an excellent retirement planning tool, offering disciplined savings with tax efficiency. Its long-term nature makes it ideal for life goals, such as children's education, marriage, or building a retirement corpus.

Do's and Don'ts when using Public Provident Fund

Do’s

Continue to invest in the PPF account annually to keep it active.
You can create an auto-debit mandate for automated investments on the PPF account.
Check the interest rates of your PPF account regularly, as they are reviewed periodically.
Check your account balance regularly.
Stay invested over the deposit tenure to allow your savings to grow with time.

Don'ts

Don't invest randomly. Build a savings habit and invest regularly to allow your corpus to grow.
Avoid premature withdrawals that can dent your corpus.
Don't forget the minimum annual contribution required to keep the account active.
Don't let the PPF account turn inactive due to missed contributions. Inactive accounts are frozen, and you incur a penalty to activate the account again.

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.

Start your long-term savings with PPF

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Things to know before applying for a Public Provident Fund

If you are thinking of investing in the PPF scheme, here are a few things to know:

Minimum and maximum investment:
You must contribute a minimum of ₹100 to open the PPF account. Thereafter, a minimum contribution of ₹500 and a maximum of ₹1.5 lakhs is needed every year.
Tenure:
PPF has a tenure of 15 years, which can be further extended in blocks of 5 years after maturity.
Tax implication :
Investments made to the PPF account are tax-free under Section 80C. The interest earned and the maturity proceeds also enjoy tax exemption.

Eligibility:
One account can be opened per individual. Parents can also open an account on behalf of their minor child.
Withdrawal rules:
You can withdraw the full PPF balance on maturity. After 5 years, partial withdrawals are allowed up to a specific limit. The account can also be prematurely closed in the event of a serious illness or pursuit of higher education.

Tips to use your Public Provident Fund safely

To use the PPF account safely, here are some tips that can help:

Select a reputable financial institution to open your account.

Keep checking the account balance and transactions regularly to flag any unauthorised transactions or errors.

Use secure payment gateways when using digital payment modes for investments.

If you are investing offline, pay via cheques or demand drafts.

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's no limit on extensions.

Interest is calculated on the lowest balance between the 5th and the last day of each month.

The government reviews and revises the interest rate every quarter.

You can transfer your PPF Account online from one bank or post office to another by submitting a transfer request at your current branch. The account maintains continuity, preserving all its original features and maturity period.

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.

The funds can be claimed by submitting the Death Certificate and identity proof to the branch.

When you create a PPF Account online, you commit to making annual deposits (₹500-₹1.5 lakh) for a period of 15 years.

After maturity, you can extend the term in blocks of five years with or without additional contributions.

Yes, after reactivation, by paying dues and penalties.

An account becomes inactive if you fail to deposit the minimum ₹500 in a financial year. To reactivate, pay the minimum deposit plus a penalty of ₹50 for each inactive year.

No, interest accrual stops during inactivity.

Only one account is permitted per individual.

Investments in a minor's account are eligible for tax deduction under the guardian's income tax return.

System restriction is enabled which will not allow you to invest more than 1.5 Lakh in a financial year

Opening a Provident Fund account provides comprehensive tax advantages under the EEE regime. Investments qualify for Section 80C deductions.

The maturity amount of the PPF scheme depends on the amount contributed over the tenure, any partial withdrawals made (if applicable), and the applicable interest rate. You can use online PPF calculators to find the expected maturity amount.

You can extend in five-year blocks or continue without contributions.

The balance transfers to the nominee or legal heir.

Partial withdrawals from your PPF Account are permitted from the seventh financial year onwards. You can withdraw up to 50% of the balance at the end of the fourth preceding financial year or the immediately preceding year, whichever is lower.

Yes, operated by the guardian until the minor turns 18.

No, only resident Indians are eligible to open a PPF Account.