PPF: Public Provident Fund
PPF (Public Provident Fund) is a long-term tax-free government savings scheme launched in 1968, with a 15-year tenure (extendable in 5-year blocks), Exempt-Exempt-Exempt (EEE) tax treatment, and interest set quarterly by the Government of India.
Contribution: minimum ₹500 per financial year, maximum ₹1.5 lakh per financial year (combined across all PPF accounts in one's name, including those of minor children). Up to 12 deposits per year. Interest rate reset quarterly by Ministry of Finance — 7.1% (most quarters since Q1 FY 2020-21 through FY 2025-26 indicative). Compounded annually on the lowest balance between 5th and last day of each month.
Tax treatment (EEE): contributions deductible under Section 80C (up to ₹1.5 lakh per FY); interest credited each year is fully tax-free; full corpus at maturity is tax-free. Available only under the old tax regime for the 80C deduction. Under new regime, the EE on interest and maturity is still preserved.
Tenure and withdrawal: original tenure 15 years. After 15 years, account can be (1) closed with full withdrawal, (2) extended with new contributions in 5-year blocks (Form H), or (3) extended without contributions (interest continues). Partial withdrawal allowed from 7th year onwards (max 50% of balance at end of 4th preceding year). Loan facility from 3rd to 6th year (max 25% of balance at end of 2nd preceding year, repayable in 36 months).
Richify Tip
PPF can be opened at SBI, post offices, and most public/private banks. Only one PPF account per person legally allowed (excluding minor children's accounts). Contribution before 5th of the month earns full interest for that month. NRIs cannot open new PPF; existing accounts continue till maturity but cannot be extended.
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