What is PPF (Public Provident Fund)?

What is PPF (Public Provident Fund)?

The Public Provident Fund (PPF) is one of India’s most trusted long-term savings schemes, backed by the Government of India. It offers a secure way to grow your money while enjoying tax benefits under Section 80C of the Income Tax Act.

Whether you are a salaried professional, self-employed, or even unemployed, PPF can help you build a financial cushion for the future.

Key Features of PPF

How PPF Works

When you open a PPF account with a bank or post office, you can deposit between ₹500 and ₹1.5 lakh per year. The government decides the interest rate every quarter. The maturity period is 15 years, but you can extend it for additional 5-year blocks.

You earn compound interest annually, and both the interest and maturity amount are tax-free.

Benefits of PPF

1.     Safe & Secure: Backed by the Government of India.

2.     Tax Savings: Eligible for deduction under Section 80C.

3.     Flexible Contributions: You can deposit monthly or annually.

4.     Loan Facility: Available from the 3rd to the 6th year.

5.     Partial Withdrawals: Allowed after the 5th year.

PPF Withdrawal Rules

• Full Withdrawal: Allowed only at maturity (15 years).
• Partial Withdrawal: After 5 years for purposes like education, medical treatment, etc.
• Premature Closure: Possible after 5 years for specific reasons such as medical emergencies or higher education.

PPF vs Other Savings Schemes

How to Open a PPF Account

1.     Visit your nearest bank branch or post office.

2.     Fill out the PPF account opening form.

3.     Submit KYC documents (Aadhaar, PAN, etc.).

4.     Deposit the initial amount (minimum ₹500).

💡 Many banks like SBI, ICICI, and HDFC also allow you to open a PPF account online.

Internal & External Links

• Learn about PPF vs VPF for better investment decisions.
• Check the latest PPF interest rates.
• Compare with EPF and its benefits.

FAQs on PPF

Q1. Who can open a PPF account?
Any Indian citizen, including minors through their guardians.

Q2. Is PPF better than fixed deposits?
PPF usually offers better tax benefits and is government-backed, making it safer than many FDs.

Q3. Can I have more than one PPF account?
No, you can only have one PPF account at a time.

Q4. What happens if I miss a yearly deposit?
You can reactivate the account by paying the penalty and pending deposits.

Q5. Is the interest earned on PPF taxable?
No, PPF interest is completely tax-free.

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