What is PPF account?

Amongst the various schemes introduced by the government, one may be entirely puzzled figuring out which scheme has been designed for which kind of benefit. Hence asking an individual hailing from a non-commerce background and a newbie to this industry about his/her PPF account, will a very complicated question for him/her. Not only is this but many other monetary issues possibly ambiguous to a major portion of the population who belong to a non-commerce background.


What is PPF?

Abbreviated from Public Provident Fund, and established by the National Savings Institute under the Ministry of Finance in the year 1968, is the most tax-efficient and tax-free savings program in India.

To gain profits on one’s savings, people deposit sound amount of their income to a PPF account. Guaranteed by the Central Government depositions made in these accounts are non-taxable.
Depositions made to the account are obeyed as per the financial year, i.e. April 1st to March 31st rather than the calendar year. According to the to latest, financial budget, the interest rate provided to its clients was 8.1%.


Highlights of a PPF account:

  • Duration – With regular renewal’s one can deposit into a PPF account up to 15 years.
  • Interest Rate – Every budget announces the rate of interest provided to the PPF account holders. Also, no tax is deducted from the interest earned.
  • Opening an Account – By paying a nominal amount of Rs.100 by either cash/cheque an account can be opened. Accounts can also be opened for minors, which with regular renewals will turn into a major’s account.
  • Withdrawals – Annually money can be withdrawn from the PPF account, once an individual has successfully made depositions up to 7 years.
  • Loan Facility – Between the 3rd and 6th financial year, a loan can be leased to the account holder on the amount he/she has deposited.
  • Risks – Guaranteed by the Central Government, it is a very safe investment and has the money cannot be attached to any court decree order.


Eligibility for opening a PPF account:

A citizen of India, who is 18 years old and above and who doesn’t belong to a Hindu Undivided Family is eligible to open a PPF account. Nonetheless, even Minors can have a PPF account; only if not more than Rs. 1.5 lakhs is deposited in the minor’s as well as the guardian’s account collectively. NRI’s and foreigners absolutely cannot invest in this scheme.


Opening a PPF account:

Arriving at a Post Office or any of the Nationalized Banks, one requires an application form for opening a PPF account along with valid Identity Proofs like Aadhar Card, Passport, Driving license, Bank statements, and an address proof. A person also needs to carry with himself latest passport size photographs and a signed cheque. The person mandatory also requires a nominee and thereafter fill the Nomination form.



One of the safest and most economically profitable schemes, with long-term, tax-free protection a PPF account serves as one of the best schemes to invest in for a relaxed Retirement.

So, have do you have an account yet? If not, hurry, don’t be late and grasp this amazing opportunity!

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