/axis-bank_rewamp-banner_investment_public-provident-fund-(ppf)_desktop_1366-x-400-pxddcd552f-0aee-4283-b3c5-21fc238cff0b.webp?sfvrsn=3ace4f17_1 "PPF - 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 advantage... Read More
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.
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.
The Government of India backs your investment and carries a sovereign guarantee, ensuring complete protection of your principal amount and interest earnings.
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.
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.
After three years, you can take out loans against your PPF Account balance. Additionally, partial coverage offers financial flexibility during emergencies.
Visit any Axis Bank branch with the following documents:
1 passport size photograph
Address proof
Identity proof
Birth certificate in the case of minor
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:
Offline withdrawal process
Here is how you can go about the offline process:
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.
Investment Amount
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.
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.
If you are thinking of investing in the PPF scheme, here are a few things to know:
To use the PPF account safely, here are some tips that can help:
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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