What is the minimum and maximum PPF investment per year?

The minimum deposit in PPF is ₹500 per financial year, and the maximum is ₹1,50,000 per financial year. Deposits can be made in a lump sum or in a maximum of 12 installments per year. If you fail to deposit even ₹500 in a year, your account becomes inactive and you must pay ₹50 penalty per year to reactivate it.

What are the PPF premature closure rules?

PPF accounts can only be closed prematurely after 5 financial years from account opening, and only under specific circumstances: serious illness of account holder or family members, higher education of the account holder or dependent children, or change in residency status (NRI). A penalty of 1% reduction in the applicable interest rate is imposed on premature closure.

PPF Calculator — Public Provident Fund Returns Calculator

Q: Can an NRI open a PPF account?

No, NRIs (Non-Resident Indians) are not allowed to open a new PPF account. However, if someone had a PPF account before becoming an NRI, they can continue contributing until the end of the initial 15-year term but cannot extend it. NRIs must close the account at maturity.

Q: Can I open a joint PPF account?

No, PPF accounts cannot be opened jointly. They are strictly individual accounts. However, you can open a PPF account in the name of a minor child and manage it as a guardian. In that case, the combined contribution of the adult's own PPF account and the minor's PPF account cannot exceed ₹1,50,000 in a financial year.

Q: Can I take a loan against my PPF balance?

Yes, you can take a loan against your PPF balance from the 3rd to 6th financial year of the account. The maximum loan amount is 25% of the balance at the end of the 2nd year preceding the year of loan application. The interest on the loan is 1% above the PPF interest rate. If you don't repay within 36 months, the interest rate increases to 6% above the PPF rate.

What is PPF? Why 6 Crore Indians Trust It

Public Provident Fund (PPF) is a government-backed long-term savings scheme introduced in 1968 by the National Savings Institute of India. With over 6 crore active accounts, it remains one of the most popular investment vehicles for conservative Indian investors.

PPF enjoys EEE (Exempt-Exempt-Exempt) tax status — the rarest and most valuable tax treatment available in India. This means: your annual investment is tax-exempt under Section 80C (up to ₹1.5 lakh), the interest earned is completely tax-free, and the maturity amount is fully tax-exempt. No other safe investment instrument offers this triple tax advantage.

The current PPF interest rate is 7.1% p.a., set quarterly by the government. Historically, PPF rates have ranged from 4% (1974) to 12% (1999), with the current rate in effect since April 2020. Even at 7.1%, the effective yield is much higher when you factor in the 30% tax bracket — a 7.1% tax-free return is equivalent to a 10.1% pre-tax return for someone in the 30% slab.

How PPF Works

Minimum investment: ₹500 per year | Maximum: ₹1,50,000 per year
Lock-in period: 15 years (with 5-year extension blocks thereafter)
Interest is compounded annually and credited on 31st March each year
Can be opened at Post Offices, SBI, and most nationalized banks
Deposits: up to 12 times per year; lump sum also allowed
Interest is calculated on minimum balance between 5th and last day of each month — deposit before the 5th!

PPF vs FD vs ELSS vs NPS — Full Comparison

Feature	PPF	FD (Tax Saver)	ELSS	NPS
Returns	7.1% (guaranteed)	6–7% (taxable)	10–15% (market)	8–12% (market)
Tax on Investment	80C — ₹1.5L exempt	80C — ₹1.5L exempt	80C — ₹1.5L exempt	80C + 80CCD
Tax on Returns	100% Tax-Free	Fully taxable	12.5% LTCG above ₹1.25L	60% tax-free at maturity
Lock-in Period	15 years	5 years	3 years (shortest)	Till age 60
Risk Level	Zero risk	Zero risk	Market risk	Market risk
Partial Withdrawal	From Year 7 only	Not allowed	After 3 years	Restricted
Loan Facility	Yes (Yr 3–6)	No	No	No

Verdict: PPF wins on safety + tax efficiency. ELSS wins on liquidity + return potential. The ideal portfolio for a 30% bracket investor: max PPF for guaranteed tax-free savings, then ELSS or mutual fund SIP for long-term wealth creation.

PPF Withdrawal Rules Explained

Partial Withdrawal (From Year 7)

After completing 6 financial years, you can make one partial withdrawal per year. The maximum amount you can withdraw is the lower of: 50% of the balance at the end of the 4th year preceding the year of withdrawal, or 50% of the balance at the end of the immediately preceding year.

Full Withdrawal (At Maturity — 15 Years)

After 15 years from the end of the financial year in which the account was opened, you can withdraw the entire amount. The full maturity corpus — principal + interest — is completely tax-free. No TDS, no capital gains tax.

Premature Closure (After 5 Years)

Allowed only for: serious illness of subscriber or family, higher education of dependent children, or change in residency status. A penalty of 1% reduction in interest rate applies for the entire period.

PPF Extension Rules

Without contribution: Extend for 5 years with no new deposits. The balance earns PPF interest and can be fully withdrawn anytime during the extension period.
With contribution: Submit Form H within 1 year of maturity. Continue investing up to ₹1.5L/year, maintain 80C benefit, one withdrawal per year (up to 60% of balance at start of extension).
Extensions are in 5-year blocks. You can extend multiple times.

Who Should Invest in PPF?

PPF is ideally suited for:

Salaried employees in the 20–30% tax bracket who want to maximize Section 80C benefits with guaranteed returns
Self-employed professionals (doctors, CA, consultants) who don't have EPF and need a government-backed retirement savings vehicle
Risk-averse investors who cannot stomach market volatility but want better returns than bank FDs
Parents investing for children's education or marriage goals 15+ years away
Retirement planners who want a tax-free corpus to supplement EPF and pension

Key insight: Investing the full ₹1.5 lakh every year starting at age 25, you accumulate approximately ₹65 lakh by age 40 (15 years). Extend for another 10 years (to age 50), and your corpus grows to over ₹1.7 crore — entirely tax-free. That's the power of PPF's compounding + EEE status.

Frequently Asked Questions

Can an NRI open a PPF account? +

No, NRIs cannot open a new PPF account. If you had an account before becoming an NRI, you can continue until the initial 15-year term ends, but cannot extend it. NRIs must close the account at maturity.

What is the minimum and maximum PPF deposit per year? +

Minimum: ₹500 per financial year. Maximum: ₹1,50,000 per financial year. Deposits can be made in up to 12 installments. Missing even ₹500 in a year makes the account inactive, requiring ₹50/year penalty for reactivation.

What are the premature closure rules for PPF? +

PPF can only be closed prematurely after 5 financial years, and only for: serious illness of account holder or family, higher education of dependent children, or change in residency status (becoming NRI). A penalty of 1% reduction in interest rate applies for the entire period.

On which date is PPF interest calculated? +

PPF interest is calculated on the minimum balance between the 5th and last day of each month. This means deposits before the 5th of any month earn interest for that full month. Always deposit before the 5th to maximize returns — this can mean ₹5,000–₹10,000 more over 15 years.

Can I open a joint PPF account? +

No. PPF accounts are strictly individual. However, you can open a PPF account in a minor child's name (as guardian). The combined contributions to your own account and the minor's account cannot exceed ₹1,50,000 per financial year.

Can I take a loan against my PPF balance? +

Yes, from the 3rd to 6th financial year. Maximum loan: 25% of balance at end of 2nd year preceding the loan year. Interest: 1% above PPF rate. Repay within 36 months or interest jumps to 6% above PPF rate. After the 6th year, you can make partial withdrawals instead of taking loans.

PPF Calculator

PPF Corpus Growth — Year by Year

📋 Year-by-Year Breakdown