Public Provident Fund, commonly called PPF, is one of the most popular saving schemes in India. It is trusted by millions of people because it is backed by the Government of India. Many people choose PPF because it is safe, gives a good return, and also helps save tax.

1. What is PPF?

PPF is a long-term savings scheme started by the Government of India in 1968. It was created to encourage people to save money for the future in a safe way.

When you invest in PPF, you put money in your account every year. The government pays you interest on that money. Over time, your money grows with interest, and at the end of the scheme, you can withdraw it.

The best part is that PPF is risk-free because it is backed by the government. Unlike stock markets, there is no danger of losing your money.

2. Who can open a PPF account?

• Any Indian citizen can open a PPF account.
• It can be opened by salaried, self-employed, or unemployed individuals.
• Minors (children) can also have a PPF account. In this case, the account is opened by their parent or guardian.
• Only one account per person is allowed.

NRIs (Non-Resident Indians) cannot open a new PPF account.

3. Where can you open a PPF account?

You can open a PPF account in:

• Any post office in India.
• Most public sector banks like SBI, Bank of Baroda, Punjab National Bank.
• Some private banks like ICICI Bank, Axis Bank, HDFC Bank.

Many banks now allow you to open a PPF account online if you have internet banking.

4. How to open a PPF account

Opening a PPF account is simple:

1. Visit the bank branch or post office.
2. Fill out the PPF account opening form.
3. Submit documents like identity proof, address proof, and a passport-size photo.
4. Deposit the minimum amount to start the account (₹500).
5. You will get a PPF passbook or online account details.

If you are opening online, the process will be through your internet banking portal.

5. How much can you deposit in PPF?

• Minimum deposit: ₹500 per year.
• Maximum deposit: ₹1,50,000 per year.
• You can deposit money in a lump sum or in installments (maximum 12 installments per year).

If you do not deposit at least ₹500 in a year, your account becomes inactive. You can reactivate it by paying a penalty of ₹50 per year plus the minimum deposit.

6. PPF interest rates

The government decides the PPF interest rate every three months. It is usually higher than the interest rate of savings accounts and fixed deposits in banks.

For example, as of 2025, the interest rate is around 7.1% per year. This rate is compounded yearly, which means you earn interest on your interest.

7. Lock-in period of PPF

The PPF account has a lock-in period of 15 years. This means you can withdraw the full amount only after 15 years.

However, you can extend the account in blocks of 5 years after maturity if you wish to continue saving.

8. Tax benefits of PPF

PPF is very popular because it is completely tax-free. It comes under the EEE (Exempt-Exempt-Exempt) category:

1. The amount you deposit can be claimed as a deduction under Section 80C (up to ₹1.5 lakh per year).
2. The interest you earn is not taxed.
3. The maturity amount you get after 15 years is also tax-free.

This makes PPF one of the best tax-saving investments in India.

9. Withdrawal rules

You cannot take out your full money before 15 years, but there are some withdrawal options:

• Partial withdrawal is allowed from the 7th year onwards.
• You can withdraw up to 50% of the balance at the end of the 4th year or the previous year, whichever is lower.

This is useful if you need money for emergencies like education or medical treatment.

10. Loan against PPF

You can take a loan against your PPF balance between the 3rd and 6th year of the account.

• The loan amount can be up to 25% of the balance at the end of the second year before the year of loan application.
• The interest rate on the loan is usually 1% higher than the PPF interest rate.

This is helpful if you need quick funds without breaking your savings.

11. Benefits of PPF

1. Safe and secure – Backed by the Government of India.
2. Good returns – Higher than most bank fixed deposits.
3. Tax-free – No tax on deposit, interest, or maturity.
4. Long-term growth – Ideal for retirement planning.
5. Partial withdrawals – Available after the 6th year.
6. Loan facility – Easy loan without credit checks.

12. Things to remember

• Deposit before the 5th of the month to get interest for that month.
• Stick to the ₹1.5 lakh annual limit to get full tax benefit.
• Do not open more than one account; it is not allowed.
• Keep the account active by depositing at least ₹500 each year.

13. Example of PPF growth

Let us see how your money grows if you invest ₹1.5 lakh every year for 15 years at 7.1% interest:

• Total deposit in 15 years: ₹22,50,000
• Total interest earned: Around ₹14,90,000
• Maturity amount after 15 years: Around ₹37,40,000

This shows how the power of compounding works over time.

In this example, you invest ₹1.5 lakh each year for 15 years. If you want to check other scenarios based on your own deposit and interest rates, use our Public Provident Fund Calculator.

14. Quick table – PPF at a glance

Conclusion

PPF is one of the safest and most rewarding ways to save for the future. It is perfect for people who want guaranteed returns, tax savings, and a disciplined approach to long-term investment. Whether you are a salaried person, self-employed, or even saving for your child, PPF can help you build a strong financial base.

Start early, invest regularly, and enjoy the benefits of compounding over the years.