Public Provident Fund – All You need to know
Public Provident Fund is one of the famous savings options among investors, like bank deposits and postal deposit schemes, SSY, etc.
In addition, for investors who have a low risk appetite and want guaranteed returns, this scheme is ideal for them.
Moreover, this scheme can be opened with Rs. 500, and the present interest rate is 7.1%.
Important Features of PPF…
Lock In Period…
PPF is a long-term investment product, and the lock-in period is 15 years.
So, the maturity of this account is after 15 years, and the amount can be withdran in full after 15 years only.
In addition, the tenure of the scheme can be extended after maturity for a block of 5 years.
And pre-mature withdrawals are allowed only in cases of emergencies.
PPF Interest Rates…
The interest rate will be set and paid by the Government of India every quarter.
In addition, the latest interest rate for this account is 7.1% from 1st, January 2025, to 31st, March 2025, which is set at 7.1%.
Moreover, each interest amount will be calculated and added to the PPF account.
In addition, interest will be calculated from the 5th to the end of the month and will be added to the PPF account at the end of the financial year.
So, its better to make the contribution to this account before the 5th of every month.
Minimum and Maximum Contribution to Public Provident Fund…
The minimum amount that can be done towards this account per financial year is Rs. 500, and maximum amount is Rs. 1,50,000.
Taxation on PPF account…
This scheme has EEE benefits.
Which means at the time contribution for this scheme, on interest and on maturity on all three taxation is zero.
Loan against PPF account…
A loan against this account is possible against the PPF balance.
However, the loan can be taken after completion of one year.
But before the completion of five years (from the end of FY in which the account was opened).
In addition, the maximum loan amount that can be taken is 25% of the ppf balance at the end of the 2nd year or preceding the year in which the loan has applied.
Eligibility for PPF account…
Documents required to open a PPF account…
- PPF account opening form; this can be obtained from any bank that is authorised to open this account.
- KYC documents like Aadhar card, driving licence, voter ID, and PAN card.
- Proof of address.
- Passport-size photograph of the individual.
- Nomination form E (the bank will provide you with where you are opening this account).
How to open this PPF account?…
This account can be opened at post offices, nationalised banks, and some private banks.
Banks authorised to open this PPF account are…
| Indian Overseas Bank | Axis Bank | State Bank of India | IDBI Bank |
| ICICI Bank | Bank of Baroda | HDFC Bank | Corporation Bank |
| Oriental Bank of Commerce | Bank of India | Allahabad Bank | Central Bank of India |
| Canara Bank | Union Bank of India | Indian Bank | United Bank of India |
| Bank of Maharashtra | Punjab National Bank | Dena Bank | Vijaya Bank |
Imp Note..
The bank is only an intermediary. In addition, the money collected will go to the Government of India, not to the bank or post office.
How to check PPF balance?…
If this account is open with the help of net banking, checking the balance is easy.
How to check PPF balance offline?…
The bank will provide a separate passbook for this account.
In addition, PPF account number, bank, branch name, credits and debits, etc. are printed on this book.
- This account’s details can be updated periodically by visiting the bank or post office.
- In some banks, you can update the account details with the help of automatic updating machines.
- Once updated, credits/debits and PPF account balance will show case on the pass book.
How to withdraw money from a PPF account?…
- 50% of the ppf account balance as at the end of the financial year, preceding the year of withdrawal or
- 50% of the account balance as at the end of the 4th financial year, preceding the year of withdrawal.
Loan against PPF account…
The facility to avail loan against the PPF account is available after expiry of one year but before expiry of five years (from the end of the FY in which the initial subscription was made). Only one loan can be availed in a financial year, and a second loan can be obtained only after the closure of the first loan.
Interest on Loan against PPF…
If the loan amount is repaid within the 36 months from the date of loan taken, then interest is 1% over and above the ppf interest rate.
And if the loan is repaid after 36 months, then the interest rate will be 6% over and above the PPF interest rate.
PPF nomination…
Nomination for this account is done for more than one person.
In addition, the percentage share must be selected if there are more than one nominee.
- Nominations cannot be done for minor PPF accounts.
- Children, parents, spouse, relatives, and friends can be nominated under this scheme.
- Form E must be submitted for nomination purposes.
- Nomination can be modified at any point in time during the period of this account.
Transfer of PPF account…
This account can be transferred from bank to post office and vice versa.
In addition, this account can be transferred between the branches of the same bank.
Revival of PPF account…
This account will become inactive if the minimum of Rs. 500 is made towards it.
In addition, a written request must be submitted to the bank or post office where it was opened.
and a fine of Rs. 50 for each year the account has been inactive must be paid.
Finally, arrears of minimum amount of Rs. 500 for all the years the account has been inactive must be paid.
Closure of PPF account…
Premature closure of this account is not allowed within the 5-year period.
After 5 years also, it can be closed on specific grounds, like threatening health conditions that affected the account holder.
Extension of PPF…
A PPF account matures after 15 years from the end of the financial year in which the account was opened.
In addition, at maturity, the account holder has the option to extend the account for a block of 5 years.
Extension of PPF account with Contributin…
This account can be extended indefinitely after maturity for a block of 5 years.
In addition, the form H has to be submitted.
Extension of PPF account without contributions…
If the account holder has not selected any choice after maturity.
Then the extension without further contribution options will be auto-selected.
- No need to submit a form for this option.
- A maximum of one withdrawal up to the total balance in this account is allowed per year.
- Once the option is selected after maturity, the option cannot be switched between with or without contribution.
FAQ’s of PPF…
What ppf is used for…
- Public Provident Fund is used to save money to get a relatively higher interest rate compared to bank FD and also to save tax under 80 c.
Can I get interest on my inactive PPF account?…
No, interest will not be paid for accounts that are inactive.
Once the account becomes active, the interest will be calculated on the total balance at the time of revival.
Can I get a tax deduction in my name and also on my minor child name?…
No, You can claim up to a maximum of 1.5 lakh under 80 c, including your account, spouse, and children.
Can I open this PPF account in my grandchild’s name? …
No. Only parents and legal guardians can open this public provident fund for minors.
Can I extend my account for 2 years after maturity? …
No, you can extend this account for a block of 5 years.
Can I transfer my PPF account to another branch or post office? ….
Yes, you can transfer your account to another branch or post office.
How to claim PPF balance in case of death of account holder? …
The nominee can claim the public Provident Fund balance with Form G.
In addition, the nominee must attach a death certificate, affidavit, succession certificate, and passbook along with Form A.
and succession certificate is not required if the balance is less than 1 lakh.
Finally, a legal heir also can claim the amount in case of no nominee exists or survived.
Read about PPF vs. SSY—which is best for you?
Also read about different types of loans in India.
And read How to pay low interest on your home loan?
Also, read about the NPS Vatsalya Scheme…
and Read about Silent Killer: Inflation How will it make you poor slowly? …
Also read Why giving Tithe will make you poor?
and read about the Sukanya Sammridhi Yojana—All you need to know…
