IndiaFilingsIndiaFilings

Sreeram Viswanath

Published on: Sep 17, 2026

Public Provident Fund Scheme (PPF)

The Public Provident Fund (PPF) scheme is a robust investment platform that offers substantial tax benefits and savings options to the investor. Launched in 1968 by the Ministry of Finance, the scheme aims to mobilize minor funds, providing reasonable returns along with income tax advantages. Backed by the Central Government, the PPF scheme offers investors a sovereign guarantee for their principal and the interest earned. Despite its establishment decades ago, PPF remains a preferred investment avenue. This article provides an in-depth analysis of the PPF scheme and its features.

Eligibility Criteria

A PPF account is accessible to all individuals, who can open it either for themselves or on behalf of minors. However, it cannot be opened in the name of a Hindu Undivided Family (HUF). In the case of a minor, parents can open the account, and grandparents may do so if they are legal guardians appointed for the minor in case of the parents' demise.

How to Enroll in PPF

Investors can easily enroll in the PPF scheme by opening an online account with nationalized public sector banks, post offices, or select private banks. To initiate an account, one must submit relevant documents, remit the initial sum of interest, and submit Form A.

Here is a sample application form for your reference:

Initial Charges and Deposit

Opening a PPF account involves a one-time charge of Rs. 100, along with a minimum deposit requirement of Rs. 500.

Number of Accounts and Declaration

Each individual is allowed only one PPF account, and this must be stated in the application form. If a second account is inadvertently opened, it will be deemed redundant, though amalgamation of accounts may be possible with approval from the Ministry of Finance.

Reviving a Deactivated PPF Account

If contributions are not made over a period, the account will be deactivated. Reviving it requires paying a fee of Rs. 50 for each year of inactivity, plus a deposit of Rs. 500 for each year missed.

Discover more about financial investments like Private Equity for Startups.

Maximum Investment Limits

Subscribers can deposit between Rs. 500 and Rs. 1,50,000 per annum. Contributions can be made in installments or a lump sum. Deposits exceeding Rs. 1.5 lakhs will not earn interest and will be refunded.

Deposit Frequency

You can make monthly deposits throughout the year. It is advisable to deposit by the 5th of each month to gain full interest benefits for that month.

Duration of the PPF Scheme

The standard tenure for the PPF scheme is 15 years, extendable in 5-year slabs.

Current Interest Rate

The current interest rate is 7.6% per annum, with changes occurring quarterly based on government securities yields.

Compound Interest Facility

The Government of India offers compound interest on PPF investments, which is advantageous for taxpayers since it is calculated on the latest principal annually.

Loan Provisions through PPF

Loan options are available from the third to the fifth year of the PPF account. A 2% interest over the current PPF rate applies. A second loan is permissible only after the first has been repaid. Note that loans are not available for inactive or ready-for-withdrawal accounts.

Tax Benefits

PPF subscribers gain tax benefits under Section 88 of the Income Tax Act. Both the income from interest and outstanding credits are exempted from income tax and wealth tax, respectively.

Nomination Options

Subscribers can appoint one or more nominees for their account, with the ability to determine their shares.

Options upon Maturity of PPF

Upon maturity, subscribers may choose from these options:

  • Withdraw all funds.
  • Continue the account without additional contributions.
  • Continue the account with further contributions.

Premature Account Closure

If necessary, accounts can be closed prematurely after five years for serious ailments or educational purposes. Documentation from a competent medical or educational authority is required.

Post-Maturity Withdrawals

After the maturity period, withdrawals can be made without incurring taxes.

For more on economic initiatives, explore the Mahaswayam Portal or understand how to file ITR-4 Forms.

Learn how to check your EPF Balance or explore opportunities like starting a One Person Company.

Back to Learn

Frequently Asked Questions

Common questions about Public Provident Fund Scheme India.

No, a PPF account cannot be opened in the name of a Hindu Undivided Family (HUF). The article clearly states that the only prohibition with respect to the PPF scheme is that it cannot be opened in the name of an HUF.
Yes, grandparents can open a PPF account on behalf of a minor grandchild, provided they are appointed as the legal heirs of the deceased parents of the minor.
To open a PPF account, a minimum deposit of Rs. 500 along with an account initiation fee of Rs. 100 needs to be paid.
No, an individual is only entitled to have a single PPF account. The article mentions that if a subscriber opens two accounts, the second account will be considered redundant.
Deposits can be made on a monthly basis throughout the year. However, to avail the complete interest for a particular month, the deposit should be made by the 5th of that month.
The maximum amount that can be deposited in a PPF account annually is Rs. 1,50,000. Any contributions above this limit will not earn interest and will be refunded to the subscriber.
Yes, loan facilities are extended to the subscriber from the third financial year up to the fifth financial year. However, the subscriber will be charged an interest of 2% over the prevailing PPF interest rate on the loan amount.
Upon maturity of a PPF account, the subscriber can either withdraw all the funds, extend the account without making any further contributions, or extend the account by making additional contributions.
Yes, the article mentions that the subscriber is benefited with tax benefits under Section 88 of the Income Tax Act. Income from interests and the outstanding credits are completely exempted from income tax and wealth tax, respectively.
Yes, a PPF account can be prematurely closed after five years of opening it for reasons connected with treatment of serious ailments of the account holder or dependents, or for education purposes, provided the relevant documents are furnished.