The Public Provident Fund (PPF) is a government-backed savings scheme introduced under the Public Provident Fund Act, 1968. It is one of the most popular long-term investment options in India, offering guaranteed returns, tax benefits, and risk-free growth.
✅ Key Features of PPF
| Feature | Details |
|---|---|
| Introduced by | Government of India, 1968 |
| Where Available | Post Offices and Authorized Banks (SBI, ICICI, etc.) |
| Eligibility | Any Indian resident (1 account per person) |
| Tenure | 15 years (can be extended in 5-year blocks) |
| Minimum Deposit | ₹500 per year |
| Maximum Deposit | ₹1.5 lakh per year |
| Deposit Frequency | Lump sum or up to 12 installments per year |
| Mode of Deposit | Cash, cheque, demand draft, online transfer (through net banking / IPPB / DakPay) |
| Interest Rate | Currently 7.9% per annum (Q2 FY 2025) (compounded annually) |
| Tax Benefits | EEE Status: Contribution, Interest, and Maturity – all Tax-Free |
| Loan Facility | Available from 3rd year to 6th year |
| Partial Withdrawal | Allowed from 7th year onwards |
| Nomination Facility | Available |
💰 Investment & Returns
- If you invest the maximum ₹1.5 lakh every year:
- Over 15 years: You will deposit ₹22.5 lakh.
- With compounding @ 7.9%: You can get around ₹43.6 lakh on maturity.
- If you invest daily ₹411 (≈ ₹1.5 lakh annually), this is often called the “₹411-a-day PPF plan”, which results in the same ₹43.6 lakh corpus in 15 years.
Public Provident Fund (PPF) – 411 Rs Scheme
🏦 Loan & Withdrawal Rules
- Loan Facility:
- Available from 3rd to 6th financial year.
- Up to 25% of balance at the end of 2nd year.
- Loan interest = PPF rate + 1%.
- Partial Withdrawals:
- Allowed after 7th year.
- Maximum 50% of balance (lowest of 4th year’s balance or previous year’s balance).
- Premature Closure:
- Allowed after 5 years only for higher education, medical treatment, etc.
- 1% penalty on interest.
🛡️ Safety & Risk
- 100% Government of India guaranteed.
- Not linked to stock markets (unlike mutual funds or equities).
- Principal + Interest fully safe.
Tax Benefits
- Section 80C: Up to ₹1.5 lakh deduction on investment.
- EEE Category:
- Investment = Tax-free
- Interest earned = Tax-free
- Maturity amount = Tax-free
📂 How to Open a PPF Account
- At Post Office or authorized banks.
- Documents needed:
- Aadhaar Card, PAN Card, Address Proof
- Passport-size photo
- Nomination form
- Deposit via cheque, cash, DD, or online banking.
📊 Example – ₹1.5 Lakh Investment Every Year
- Investment (15 years): ₹22.5 lakh
- Maturity Amount (15 years @ 7.9%): ≈ ₹43.6 lakh
- Total Interest Earned: ≈ ₹21.1 lakh
Why Choose PPF?
- Safe, guaranteed returns.
- Ideal for retirement planning.
- Best for tax savings under Section 80C.
- Long-term compounding power.
👉 In short: PPF is one of the safest, most tax-efficient, and long-term wealth creation tools in India.
Would you like me to also create a 15-year year-by-year maturity chart (investment vs. interest vs. total balance) so you can see exactly how your money grows in PPF?
