What is Public Provident Fund?
Backed by the Government of India, Public Provident Fund (PPF) is a low-risk tax-saving investment that offers guaranteed returns. Unlike the Employees’ Provident Fund, which is restricted only to salaried employees, PPF is open to subscription by all individuals.

Does PPF have a lock-in period?
PPF comes with a lock-in period of 15 years. After this period, you can extend the tenure by blocks of 5 years. This makes the scheme one of the best long-term tax-saving investments for risk-averse individuals, as it comes with a relatively high rate of interest and slight risk. The PPF scheme also allows premature partial withdrawals from the 7th year.  

Eligibility criteria
  • Any resident Indian above the age of 18 can apply for a PPF account.
  • A resident minor individual can also apply for a PPF account through a legal guardian.
  • An individual subsequently categorised as an NRI after opening a PPF account can continue to make deposits till maturity.
  • Each individual can open only one PPF account.
Features of a Public Provident Fund account

Minimal documentation: To open a PPF account, you only require an identity proof, address proof, a passport-sized photograph, and an account opening form duly signed and filled.

Deposit limits: You need to make a minimum deposit of at least ₹500 in each financial year. The maximum amount you can deposit in a year is limited to ₹1.5 lakh. Furthermore, to keep your PPF account active, you need to make at least one deposit in a year. The maximum number of deposits you can make each financial year is limited to 12.

Nominee addition: The Public Provident Fund scheme allows you to appoint a nominee at any point during the investment tenure.

Loan on deposits: PPF also allows you to avail loans on your deposits after the expiry of 3 active years. However, you cannot borrow more than 25% of the closing balance as at the end of the previous year.

Account transfer: You can transfer your PPF account between banks and post office accounts across the country free of charge.

Tax benefits of a PPF account
  • Section 80C of the Income Tax Act offers tax benefits on PPF investments up to a limit of ₹1.5 lakh in a financial year.
  • Any interest that you earn on a PPF account on the investments is also tax-free.
  • Tax benefits are applicable even on the maturity amount, as it is wholly exempted from taxation.