The Public Provident Fund (PPF) is a Central Government of India Saving Scheme. The Public Provident Fund Interest rate in the Post Office keeps changing with Govt. notifications.
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What is the Post Office Public Provident Fund Scheme?
Post Office Public Provident Fund Scheme is a 15-year PPF scheme. The investor has to deposit money for 15 financial years and after post completion of 15 years one can either close the account or extend it further.
PPF Scheme is suitable for risk-averse investors who wish to enjoy tax benefits under section 80C, tax-free returns and tax-free maturity.
Public Provident Fund Scheme – Features
| Minimum Amount to open PPF | Minimum Investment -Rs. 500 |
| Minimum & maximum Investment | Minimum Investment – Rs. 500 per FY Maximum Investment – Rs.1,50,000 per FY |
| Risk | Backed by Central Govt. of India |
| Tenure | PPF investment tenure is 15 years. That means PPF investor has to deposit a minimum of Rs 500 every Financial year. |
| Who can Open | a single adult by a resident Indian. OR a guardian on behalf of a minor/ person of unsound mind. |
| PPF A/C extension | PPF Account can be extended for a block of 5 year ( any number of times) post completion of 15 years |
| Frequency of deposit | Any- monthly, quarterly, Half year yearly, Yearly or whenever you wish to / minimum deposit of Rs 500 every Financial year |
| tax Benefit | EEE advantage – Deduction U/S 80C, Interest tax free , maturity – Tax Free |
| Loan | Loan can be taken from 3rd Financial year to 5th Financial year completion |
| partial Withdrawal | From 7th Financial year |
| Maturity | PPF will mature after completion of 15 year ( 15 year counted from the end of of opening year) |
| Premature Closure before 15 years | Not allowed |
A Public Provident Fund offers safe,secure returns for long tenure. PPF is a great investment scheme for risk averse investors. Further This scheme also provides diversification, tax benefit to investor (EEE advantage). Since PPF money can not be attached to court decree, it makes it more safer for investors with huge debts also.
Moreover PPF account become safe heaven for senior citizens because of its tax free withdrawals and guaranteed safe returns.
What are the Eligibility Criteria for PPF Post Office?
Any resident Indian can open a PPF account for himself on behalf of a minor child or a person of unsound mind of whom he/she is a guardian.
#Joint account is not allowed.
a #If you open an account on behalf of a minor then the minor will operate the account himself when he becomes a major.
#Individuals who have GPF or EPF can also open a PPF account.
Can NRI Invest in PPF Account?
–NRI cannot open a new PPF account but if the resident individual becomes NRI after opening the account then he can continue the account till maturity on non-repatriation basis.
But no extension is allowed after maturity in case of NRI.
NRI can prematurely close the account subject to certain conditions.
Can HUF Open PPF Account?
Hindu undivided family cannot open an new public provident fund scheme with effect from 13 May 2005. However account opened before 13 May 2005 can be continued till maturity but this account cannot be extended after 13 May 2005.
Which bank is best for PPF Account Opening?
One can open PPF account in post office, nationalized bank and a few private sector banks.
List of banks offering PPF Account & Online PPF Services
- State Bank of India
- State Bank of Patiala
- State Bank of Bikaner and Jaipur
- State Bank of Travancore
- State Bank of Hyderabad
- State Bank of Mysore
- ICICI Bank
- Bank of Baroda
- Union Bank of India
- Central Bank of India
- Bank of India
- IDBI Bank
- Vijaya Bank
- Allahabad Bank
- Oriental Bank of Commerce
- Bank of Maharashtra
- Canara Bank
- Dena Bank
- Indian Overseas Bank
- Punjab National Bank
- United Bank of India
- Corporation Bank
- Axis Bank
- Indian Bank
Minimum & Maximum Deposit Amount in PPF The Minimum Deposit amount is Rs 500 per financial year and the maximum deposit amount is Rs 1.5 Lakh per financial year.
#you can deposit in one lump sum or installments in a financial year. There is no limit on the number of instalments in the month of the financial year.
–But the maximum amount of deposit is only 1.5 lac in a financial year for both individual self accounts and the account of a minor or of whom he is the guardian taken together.
Best time to deposit money in PPF Account
If you are planning to deposit monthly then the 1st to 5th of every month is the best time to deposit money.
If you are planning to deposit quarterly then 1st to 5th April, July, October and January at the best times to deposit.
–For half-yearly deposits, the 1st to 5th of April and October are the best time to deposit.
and if you are planning to deposit yearly -the 1st to 5th of April is the best time to get the maximum interest on your money.
Is it necessary to deposit in PPF every year?
If you fail to deposit the minimum amount during any financial year in PPF account than the account will become inactive
Every time you have to reactivate the account by paying a penalty of Rs 50 for each financial year of default and a minimum deposit of Rs 500 for each financial year of default.
Example: Bestii forgets to deposit for two consecutive financial year instalments in his PPF account. He has to pay Rs 100 as penalty charges and Rs.1000 ( minimum payment of Rs 500 per Financial Year) to reactivate the account.
What if you do not reactivate your PPF Account?
The active provident fund scheme will continue to earn interest as per the applicable interest rate of the scheme till maturity. However, inactive accounts will not qualify for loan or partial withdrawal.
If your account is inactive then you are not allowed to open another provident fund scheme till you close the inactive account after the maturity period.
Public Provident Fund Interest Rate in Post Office
The current Public Provident Fund Interest Rate in Post Office is 7.1% per annum.
Historical Public Provident Fund Interest Rate in Post Office
| Period | Interest Rate | Limit for Investment |
|---|---|---|
| 01.04.1968 to 31.03.1969 | 4.80 | 15000 |
| 01.04.1969 to 31.03.1970 | 4.80 | 15000 |
| 01.04.1970 to 31.03.1971 | 5 | 15000 |
| 01.04.1971 to 31.03.1972 | 5 | 15000 |
| 01.04.1972 to 31.03.1973 | 5 | 20000 |
| 01.04.1973 to 31.03.1974 | 5.30 | 20000 |
| 01.04.1974 to 31.07.1974 | 5.80 | 20000 |
| 01.08.1974 to 31.03.1975 | 7 | 20000 |
| 01.04.1975 to 31.03.1976 | 7 | 20000 |
| 01.04.1976 to 31.03.1977 | 7 | 20000 |
| 01.04.1977 to 31.03.1978 | 7.50 | 20000 |
| 01.04.1978 to 31.03.1979 | 7.50 | 30000 |
| 01.04.1979 to 31.03.1980 | 7.50 | 30000 |
| 01.04.1980 to 31.03.1981 | 8 | 30000 |
| 01.04.1981 to 31.03.1982 | 8.50 | 30000 |
| 01.04.1982 to 31.03.1983 | 8.50 | 40000 |
| 01.04.1983 to 31.03.1984 | 9 | 40000 |
| 01.04.1984 to 31.03.1985 | 9.50 | 40000 |
| 01.04.1985 to 31.03.1986 | 10 | 40000 |
| 01.04.1986 to 31.03.1988 | 12 | 40000 |
| 01.04.1988 to 31.03.1999 | 12 | 60000 |
| 01.04.1999 to 14.01.2000 | 12 | 60000 |
| 15.01.2000 to 28.02.2001 | 11 | 60000 |
| 01.03.2001 to 28.02.2002 | 9.50 | 60000 |
| 01.03.2002 to 31.03.2002 | 9.00 | 60000 |
| 01.04.2002 to 28.02.2003 | 9 | 70000 |
| 01.03.2003 to 31.03.2011 | 8 | 70000 |
| 01.04.2011 to 30.11.2011 | 8 | 100000 |
| 01.12.2011 to 31.03.2012 | 8.60 | 100000 |
| 01.04.2012 to 31.03.2013 | 8.80 | 100000 |
| 01.04.2013 to 31.03.2014 | 8.70 | 100000 |
| 01.04.2014 to 31.03.2016 | 8.70 | 150000 |
| 01.04.2016 to 30.09.2016 | 8.10 | 150000 |
| 01.10.2016 to 31.03.2017 | 8 | 150000 |
| 01.04.2017 to 30.06.2017 | 7.90 | 150000 |
| 01.07.2017 to 30.09.2017 | 7.80 | 150000 |
| 01.01.2018 to 30.09.2018 | 7.60 | 150000 |
| 01.10.2018 to 30.06.2019 | 8.00 | 150000 |
| 01.07.2019 to 31.03.2020 | 7.90 | 150000 |
| 01.04.2020 to 30.09.2022 | 7.10 | 150000 |
| 01.10.2022 to 31.12.2022 | 7.10 | 150000 |
| 01.01.2023 to 31.03.2024 | 7.10 | 150000 |
The aAnnual interest rate is not fixed. It is determined by the Central Government of India from time to time. The interest rate is announced on a quarterly basis now.
PPF account compounds annually and interest is credited to the account at the end of the financial year.
How to open a PPF Account?
You can open PPF( Public Provident Fund) either online or offline. PPF online can be activated by visiting bank portal.
For online account opening you can visit the portal of chosen bank or post office.
The following documents are required to open the PPF Account:
Following documents are required to open PPF account
- KYC documents for verifying the identity of the person such as Aadhar card,Driver’s licence or Voter ID etc.
- PAN Card
- Residence Address Proof
- Form for nominee declaration
- Passport size photograph
PPF Account Tax
PPF offers tax benefits U/S 80 C of the Income Tax Act of 1961. PPF offers an EEE advantage. You can deposit 1.5 lac in a financial year to get the tax benefit.– PPF account is attractive because interest is tax-free and even maturity is also tax-free.
Post Office Public Provident Fund Calculator
FAQs
Is PPF rate of interest constant or fixed?
PPF rate of interest is fixed for a certain duration only. Every quarter PPF interest rate is specified by GOI. It may or may not change or remain fixed for certain duration.
Can husband and wife both have PPF?
Both husband and wife can open separate PPF account. But joint account is not permissible.
Can I open separate PPF Account for my wife?
yes, you can open separate PPF Account for your wife.
How much money will I get after 15 years in PPF?
Assuming a constant interest rate of 8%, post completion of 15 years you will get around Rs 44 lakh ( if you deposit Rs 1.5 lac per financial year).
What if I invest 5000 in PPF for 15 years?
If I invest 5000 in PPF for 15 years on yearly basis @8% per annum, you will get near about Rs.1.47 lac and if you deposit Rs 5000 on monthly basis for 15 years then the maturity amount will be Rs. 17 lac.
Is PPF better than FD?
Please refer Is PPF better than FD?
Can I have 2 PPF accounts?
No. One person can open only one PPF account. However one can open another account if were to open the account as an guardian to a minor child.
Is PPF tax Free?
PPF Offer EEE advantage. Which means when you deposit money – you get tax deduction u/s 80C.
How to Plan Your Investment?
You can always work with a Certified Financial planner and plan your finances, including Emergency funding, building a corpus for house purchase, and taking care of your health needs so that you can plan a better retirement income in your second inning, leading to a more secure and financially stable retirement.
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