The Public Provident Fund is a famous investor plan that has various investor-friendly characteristics and related benefits. It is a long-term investment program popular with those who seek significant earnings but want predictable returns. Paramount amount security is the primary goal of those who start a PPF account.

Why Open A PPF Account?

A public provident fund scheme is appropriate for people who have an appetite for little risk. As the government mandates this scheme, it is supported by guaranteed returns to protect India’s masses’ financial necessities. Moreover, PPF investments are not connected to the market.

Investors can also implement their financial and investment portfolio diversification within a proven public fund framework. PPF accounts can assist preserve your capital through the downswing of the business cycle.


Features Of PPF Account:

Investment Tenure:

A PPF portfolio has a 15-year investment lock-in term which cannot totally remove funds prior. However, if necessary, an investor may decide to prolong the duration by five years after a lock-in term is finished.

Principal Amount:

The provisioning fund program may be investing a least of Rs. 500 and a maximum of Rs. 1.5 Lakh each year. This investment can be made on a lump sum or a lumpsum basis. However, in one financial year, a person is eligible for a PPF account for just 12 installments. PPF investments must be made annually to make sure the account stays operational.

Loan Against Investment:

The provision of public money offers the benefits of the use of investment loan amounts. However, this loan is only provided when it is accepted from the start of the third year through the end of the sixth year from the date the account has been activated.

For this purpose, a claim may only be made of 25% or less of the entire sum accessible in the account. In 36 months, you have to reimburse the debt.

Eligibility Criteria:

Indians resident in the nation may create a PPF account on their behalf. Minors may also hold a Public Provider’s Fund account in their name, as long as their parent administers it.

The opening of a new PPF account is not allowed for non-residential Indians. All current accounts, however, stay operational on their behalf until tenure has been completed. Therefore, these financial statements cannot be prolonged for five years, which is advantageous for Indians.

Interest On A Public Provident Fund(PPF) Account:

The Central Government of India determines the interest due in respect of the public provision fund plan. It is meant to deliver more interest on different commercial banks in the country than on standard accounts.

Current interest rates due on these accounts amount to 7.1 percent, subject to government revisions every quarter.

How Can One Open A PPF Account?

The individual can use offline and online processes to match the necessary parameters specified in the eligibility requirements. You may activate PPF online using the selected bank or post office portal.

At the time of registration of a public fund account, the following papers must be produced.

– KYC papers authenticate a person’s identification, such as Aadhaar, Voter ID, License of the driver, etc.
– PAN card.
– Evidence of residential address.
– Nominee Statement Form.
– The passport size photograph.

Tax Benefits:

Exemptions from income tax apply to the principal amount invested in an account under PPF. Following section 80C of the 1961 Income Tax Act, you can claim the absolute value of the investment for a tax waiver. However, it is essential to remember that Rs. 1.5 Lakh cannot be more than the entire capital invested in one financial year.

This tax advantage is also accessible cumulatively for all 80 C investments.
Total PPF investment interest is excluded from any tax computation as well.

Therefore, when maturity has been completed, the total sum paid from a PPF account must not be taxed. This strategy attracts numerous investors in India from the public fund system.


If an individual wants to withdraw money from a PPF account, there are specific stipulations to follow.
The principal amount invested in such schemes shall be subject to the obligatory 15-year lock-in. Partial pullout may occur in the event of an emergency relating to particular end uses. However, after five years of activation of the account, this sum may only be taken.

You can withdraw up to 50 percent, whichever is lower, from the entire sum on your loan at the end of the fourth or at the end of last year.

Investors should understand that monies put in a PPF account cannot be wired until the completion of the maturity period. Anyone who seeks long-term risk-free investment choices that deliver reliable returns can easily choose the government-supported instrument.

Premature Closure:

Your PPF account can only be prematurely closed under particular terms. You will earn a 1% lower interest rate than the current rate if you end your account early. One criterion is that at least five years from the date of starting your PPF account should have been completed.

When this is fulfilled, some of the instances when a premature closure is authorized are as follows:

If the account holder, the parents of the account, his dependent children, his/her spouse has a life-threatening illness. It is necessary to provide medical reports and related documentation.

If the holder of the account needs higher education funding. Relevant documentation will be requested, like receipts for fees and proof of entry.

If the status of residence changes. The needed documents include evidence of residency changes, passport copies, visas, income tax returns.


The public provident fund is the best risk-free investment. People are showing a lot of interest and do create their PPF account to earn interest and money with the help of a public provident fund.