PPF Meaning - Know What Is PPF Account & Its Benefits?

What is a PPF account?

The PPF account or Public Provident Fund scheme is one of the most popular long-term saving-cum-investment products, mainly due to its combination of safety, returns and tax savings.

The PPF was first offered to the public in the year 1968 by the Finance Ministry’s National Savings Institute.  Since then it has emerged as a powerful tool to create long-term wealth for investors.

Investors use the PPF as a tool to build a corpus for their retirement by putting aside sums of money regularly, over long periods of time (PPF has a 15-year maturity, and the facility to extend the tenure). With its attractive interest rates and tax benefits, the PPF is a big favourite with a small saver.

Why is the PPF so popular?

The PPF is popular because it is one of the safest investment products. i.e., the government of India guarantees your investments in the fund. The interest rate is set by the government every quarter. PPF scores over many other investment options mainly because your investment is tax exempt under section 80C of the Income Tax Act (ITA) and the returns from PPF are also not taxable.

Features of the PPF accounts

  • How much can you invest in the PPF? You can invest a minimum of Rs. 500 and a maximum of Rs. 1,50,000 in a financial year.
  • What is a PPF account’s tenure? A PPF has a minimum tenure of 15 years. You can extend it in blocks of 5 years if you wish.
  • Who is eligible for a PPF account? Any Indian citizen can open a PPF account.
  • You can take a loan on your PPF account between the 3rd and 5th year and make partial withdrawals after the 7th year for emergencies only.
  • You can open a PPF account with just Rs. 100 with any recognised You can make deposits every month or in a lump sum through cash, cheque, DD or online transfer.
  • The PPF accounts cannot be held jointly, though you can make a nomination.
  • You must compulsorily make a minimum deposit of Rs. 500 every year.

The government of India’s guarantee and unmatched tax benefits make a PPF account one of the safest, attractive and popular long-term investments available.

Looking to open a Public Provident Fund Account? Click here to begin.