Public Provident Fund

What is PPF?

The PPF (Public Provident Fund) scheme, introduced in the year 1968, is a tax-free savings avenue that was introduced by the Ministry of Finance (MoF) in India. The Interest amount earned on deposits in the PPF account is not taxable. Deposits made towards PPF accounts can be claimed as tax deductions. This makes the PPF Scheme one of the most tax efficient instruments in India.

The current interest on PPF account applicable for FY 2017 – 18, is 8%.

What is a PPF account?

A PPF account, similar to a bank account, is where people can deposit funds for a fixed period of time to earn returns on their savings.

How to open a PPF account? This will be the next question in the reader’s mind.

Applicants can open a Public Provident Fund account at any nationalized, authorized bank and authorized branches / post offices. PPF accounts can be opened at specific private banks as well by filling out the required forms, submitting the relevant documents and making the minimum deposit required.

However, A PPF account can be opened online too. Not all Bank Branches facilitate the opening of PPF accounts. Applicants have to visit their nearest bank branch. The list of designated branches is available either at the bank itself or on the bank website. The PPF online facility was extended to all citizens of India to facilitate a smooth opening of the PPF accounts.

The PPF account Interest rates are set and announced by the Government of India. Generally, the interest is calculated for a financial year, according to the rate announced for the said year i.e. unlike bank FDs the rates are not fixed for the entire tenure of the PPF.

The PPF investment being a long term investment proposition, the Interest rates applicable are liable to be changed periodically. To help investors, PPF has an online PPF interest rate calculator. The PPF interest rate calculator is a versatile, online, calculation tool which helps you calculate the returns, you are likely to receive on your investment as well as plan your investment for the future. The PPF online interest calculator can be accessed by visiting the website,

The Online PPF account calculator facilitates the investor to calculate the interest payable as well as prospective PPF returns, he can expect, for as many as 25 years or even 50 years.

The immense popularity and acceptance of PPF has led to the investment option, going on line with respects to transfer of funds into the PPF account too. These simple steps guide you.

  • Add the PPF Account (opened in a bank) as a beneficiary into your online banking module. The payee name and the PPF account number should match exactly with that mentioned in your PPF account.
  • Select the bank branch in which your PPF account is maintained.
  • Enter payee account number as your Public Provident Fund account number
  • Once, the above mentioned details are filled in and submitted, your PPF account will be added as a third party account.
  • You can now funds from your online banking account to your PPF account via the standard online banking process.


The PPF account details include some of the most attractive PPF benefits on offers as stated below.

  • Attractive long-term investments
  • PPF is useful for retirement planning.
  • PPF offers Tax-free returns
  • PPF is a Low-risk savings and investment scheme.
  • Easily accessible:
  • PPF funds can’t be attached under court order or laid claim to by creditors.


As per the PPF rules listed out, detailed below are the eligibility criteria to open a PPF account

  • The applicant can open only one PPF account in his name.
  • The applicant has to be 18 years or older in order to open a PPF account.
  • PPF scheme is for Citizens of India only.
  • Minors can also open a PPF account.
  • Non-resident Indians (NRIs) cannot open a PPF account. However, account-holders who leave the country and obtain non-resident status after having opened a PPF account can continue to maintain their accounts until it matures i.e. until the end of the account’s 15 year term.
  • HUFs (Hindu Undivided Families) cannot open a PPF account.


Amongst the leading banks in India, authorised to operate PPF accounts, the HDFC Bank is one of the premier banks. Applicants can visit the HDFC Bank official website, to know more on the process and formalities to open a PPF account with HDFC Bank.


A PPF member can check his PPF balance in his account either by visiting his branch or through a post office. For this, the member must quote his establishment code and PPF number.


The applicant should support his PPF application form with certain documents as listed below;

  • Passport, PAN Card, Aadhar Card, Driving License, Voter’s ID, Employer’s letter, Utility Bill, Rental/Lease Agreement, Bank Account Statements, Ration Cards, Signed Cheque
  • Passport size Photographs
  • The account opening form, along with nomination forms, if nominees are being named.
  • This is not an exhaustive list. Banks may request additional documents if necessary. In case of minors, age proof will be required i.e. the minor’s birth certificate or school certificate.


A PPF account can be opened either by visiting a post office or bank-branch or online via internet banking. An account can be opened for Rs.100 but the total deposit for the year should be a minimum of Rs.500.

The PPF scheme also comes with certain Tax benefits  which makes this investment option very attractive, especially for those using this scheme to build a retirement corpus. Features include;

  • PPF deposits fall under the EEE (Exempt, Exempt, Exempt) tax category.
  • Deposits made under Public Provident Fund Scheme can be claimed as deductions under section 80C.
  • Interest earned on these deposits is not taxable.
  • Amounts withdrawn from the PPF account do not attract wealth tax
  • Amounts deposited in a spouse’s or child’s PPF account also qualify for tax breaks.


There are certain important forms dedicated for various activities concerning PPF. Let’s take a look at them;

  • Form A – To open a Public Provident Fund Account (PPF Account)
  • Form B – To make deposits into / repay loans taken against a PPF account
  • Form C – To make partial withdrawals from a PPF account
  • Form D – To request a loan against a PPF account
  • Form E – To add a nominee to a PPF account
  • Form F – To make changes to PPF account nomination information
  • Form G – To claim funds in a PPF account by a nominee/legal heir
  • Form H – To extend the maturity period of a PPF account

Generally, the lock in period for a PPF account is 15 years. A PPF account matures after completion of 15 years. However, in case of emergencies, certain sums of money are permitted to be withdrawn after 7 years. Such withdrawals are restricted by certain PPF withdrawal rules as given below. The withdrawal can be made at the start of the financial year.

  • The amount of money that can be withdrawn is restricted to a certain amount.
  • Only 50% of the closing balance at the end of the 4th year prior to the year when the money is being withdrawn or 50% of the closing balance of the previous year, whichever is lower will be the limit.
  • If a loan has been taken from the PPF account, the loan amount will be deducted from the amount that can be withdrawn.
  • Only one withdrawal is allowed per financial year.


Public Provident Fund Scheme –Frequently Asked Questions

Questions Answers
  • Can an employee open more than one account under the PPF scheme?
  • No. PPF scheme entitles to only a single account per person.
  • Is it mandatory to name nominees in the PPF account?
  • No. it is not mandatory to name nominees.
  • What is the Maximum and Minimum deposit permitted in a PPF account?
  • The minimum amount permitted is Rs. 500 while the max is 1.5 Lakhs.
  • What is the maturity period for a PPF account?
  • The PPF account matures after 15 years. However, the holder can extend the period for as long as he wishes.
  • Can I avail loan on the PPF amount?
  • Yes. You can avail loan between the third and sixth year of your operating account.