PPF - Public Provident Fund

Public Provident Fund: PPF Account, Types & Benefits

Learn more about PPF, its features, and benefits, and how it helps you build a safe, tax-efficient retirement corpus

Written by : Knowledge Centre Team

2026-01-05

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12 minutes read

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Public Provident Fund is a small savings scheme launched in 1968 by the National Savings Institute and the Ministry of Finance. The 15-year savings scheme was to bring the self-employed and unorganised-sector employees to par with the organised-sector workers. Public Provident Fund (PPF) is a long-term savings product that provides guaranteed returns and tax benefits. PPF combines and caters to both the goals with sovereign guarantee and tax benefits of the scheme. Read along to understand what a PPF account is, its key features, and how it can help you build a secure financial future.

Key Takeaways

  • The Public Provident Fund (PPF) refers to a government-backed savings scheme which is designed to offer long-term financial security.
  • It ensures tax-free returns under the Exempt-Exempt-Exempt (EEE) category, which means that the investment, interest earned, and maturity amount are all tax-free.
  • The fixed tenure of 15 years allows flexibility for investors, letting them withdraw partially after the 5th year. You can even extend it in blocks of five years post-maturity.
  • The interest rate is pretty attractive at 7.1% per annum, which is compounded annually. Since it is unaffected by market fluctuations, you can expect guaranteed returns.
  • PPF serves as a financial backup because you can avail loans against your PPF balance. It offers liquidity where you can also maintain long-term savings.

What is Public Provident Fund (PPF)?

The Public Provident Fund (PPF) is a long-term savings scheme with competitive interest rates and guaranteed returns. One of the most incredible things about PPF is that the returns and interest gained through PPF are tax-free.

The scheme offers flexibility and partial withdrawal facilities to support you financially during the long investment tenure. The PPF Account balance is also free from attachments under court orders. Thus, it makes sense to invest in a PPF for the self-employed, as a PPF account will ensure financial stability for the family.

benefits of PPF Account

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Key Features of Public Provident Fund (PPF)

These features make PPF one of the safest and most reliable long-term savings options for individuals seeking financial stability and tax-efficient wealth creation.

Interest Rate

7.1% PA (from April 2020)

Minimum Investment Needed

₹500

Maximum Investment Limit

₹1.5 lakh PA

Tax Benefit

Up to ₹1.5 lakh under section 80C

Tenure

15 Years (Which can be renewed in blocks of 5 years)

Risk Profile

Very safe as it offers a sovereign guarantee on capital and interest

Maturity Amount

Depends on the tenure of the investment

Importance of the PPF Scheme

The Public Provident Fund (PPF) is one of the safest and most reliable long-term investment options in India. It helps individuals build a secure financial future while offering attractive tax benefits and guaranteed returns.

  • Low-risk Investment: PPF is fully backed by the Government of India, making it a secure savings option.

  • Guaranteed Returns: Unlike market-linked investments, PPF offers assured interest rates.

  • Portfolio Diversification: PPF provides stability and reduces overall investment risk.

  • Tax Benefits: Contributions qualify for Section 80C deductions, and returns are tax-free. This can be used as a tax-saving tool.

  • Ideal for Long-term Goals: Suitable for retirement planning, education funding, and wealth building.

  • Encourages Disciplined Saving: Regular deposits help create consistent saving habits.

Overall, PPF is a simple, safe, and tax-efficient investment that helps individuals achieve financial stability with minimal effort.

What is a PPF Account?

A PPF account is a government-backed long-term savings account designed to help individuals build a secure financial corpus with minimal risk. It offers a fixed tenure of 15 years, guaranteed returns declared by the government, and attractive tax benefits under the EEE (Exempt-Exempt-Exempt) category. With features like partial withdrawals, loan facilities, and the option to extend the tenure, a PPF account is widely considered a reliable tool for retirement planning and long-term wealth creation.

Reasons to Invest in a PPF Account

Investing in a PPF account is a smart way to grow your savings safely while enjoying tax benefits and long-term financial security.

  • Interest Rates: The PPF interest rates are fixed at 7.1% for the fourth quarter of FY 2025-2026, meaning from the 1st of January 2026 to the 31st of March 2026. The interest amount is calculated based on your lowest balance each month. The lowest balance is considered between the 5th and the last day of the month. That’s why, if you are investing in PPF, make contributions before the 5th day of the month.

  • Long Tenure: The PPF scheme is a long-term investment and has no maximum maturity age. The initial holding period of the PPF scheme is 15 years. You can further extend this period in blocks of 5 years. So, you can continue your PPF account for a lifetime after it matures.

  • High Investment Limit: The minimum and maximum limits to investment are set in PPF. However, this bracket is broad enough for any investor. The minimum amount that you can invest in PPF is ₹500 per annum, and the maximum amount is ₹1.5 lakhs per annum.

  • Investment Flexibility: Once you start investing in a PPF account, you can invest any amount within the given investment limits in the account. You do not have an obligation to invest a fixed sum every month or year. However, it’s better to maintain a disciplined investment streak.

  • Tax-Free Returns: As we have mentioned earlier in the article, the returns you gain from the Public Provident Fund are completely tax-free. You don’t have to pay taxes on the money you earn through the interest on your PPF investment. This can help you as a tax-saving tool.

  • Loan Against PPF: You can take a loan against your PPF account balance. The only condition is that you can take this loan after 1 year of starting a PPF account and before the expiry of 5 years. The amount of loan that you can take is 25% of your PPF balance at the end of the second year. Otherwise, the balance of the year preceding the year in which you applied for the loan is considered.

How to Open a PPF Account?

Now that you know what PPF is, you must know how to start your Public Provident Fund account:

  • Log in to the internet banking portal

  • Click on “Open a PPF Account”

  • Choose between “Self-Account” or “Minor Account”

  • Enter all the information asked on the form

  • Verify the details, e.g. PAN Number and Address

  • Now, enter the initial deposit amount for the PPF account

  • Set up standing instructions allowing your bank to periodically deduct the fixed amount from your account

  • Add the shared OTP in the appropriate field and click on submit 

Your PPF account is now open and all set. Apart from the online process, you can open your PPF account via a bank branch or Post Office as well.

For opening a PPF account offline, you will need to fill out the appropriate account opening form and submit signed copies of all KYC documents.

PPF Account - Eligibility and Documentation


Eligibility Criteria for Opening a PPF Account:

  • You should be an Indian resident

  • NRIs who had opened a PPF account while they were resident Indians can operate the account for 15 years, with no option for extension

  • If you are a parent or guardian, you can open a PPF account for your minor children

  • No multiple PPF accounts can be opened

  • No Joint PPF accounts can be opened

Documents Required to Open a PPF Account:

  • PPF Account Opening Form

  • Documents Required for KYC: Aadhaar Card, Voter ID Card, or Driving License

  • Address Proof

  • PAN Card

  • Pay-in-slip at the bank branch to transfer the amount to your PPF account, or a signed cheque in favour of your PPF account

  • Photograph (Passport-sized)

  • Form E - Nomination Form

You can get the required forms from any bank which is authorised for PPF account opening.

PPF Interest Rates

The Ministry of Finance declares PPF interest rates every quarter. These interest rates are now set every quarter based on market conditions. This was implemented in the financial year 2017-2018.  Public Provident Fund (PPF) interest rate continues to remain unchanged at 7.10% per annum, compounded annually for FY 2025-26.

The Government of India reviews small-savings scheme rates every quarter, but no revision has been announced so far for FY 2025-26, so the rate remains consistent with previous quarters.

FY 2025–26

  • April - June 2025 (Q1 FY 25–26): 7.10%

  • July - September 2025 (Q2 FY 25–26): 7.10%

  • October - December 2025 (Q3 FY 25–26): 7.10%

  • January - March 2026 (Q4 FY 25–26): 7.10%

PPF Calculator

PPF or Public Provident Fund has been the first retirement savings scheme open to the Indian public.
The Frequency of my investment will be {investmentFrequency}
My {investmentFrequency} PPF investment will be {ppfAmount} for a duration of {time} year
My name is {customerName}, my mobile number is {phoneNumber}
Hi {name}, your PPF Maturity Amount is
₹ {amountMaturity}
Current PPF Interest Rate(2022) is 7.1%
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*Disclaimer-

*Disclaimer: The PPF Calculator provides estimates based on current interest rates, which are subject to government changes. Actual returns may vary over time. Results are for informational purposes only and do not guarantee future performance or constitute financial advice. Tax benefits and regulations may change, and calculators may not reflect the latest updates. Users should consult a financial advisor for personalized guidance before making investment decisions.

Withdrawal from PPF Account

Public Provident Fund Account has a holding period of 15 years. However, you can withdraw a partial amount from your PPF account. The rules are:

  • Withdrawal of a partial amount can only be done in an emergency

  • You can withdraw this partial amount only after the completion of 5 years after opening the account

  • You can only withdraw 50% of the account balance at the end of the financial year before the year in which you try to withdraw.

  • If you are trying to withdraw after the 5th year, the account balance at the end of the 4th year will be considered. You can withdraw 50% of that amount.

  • You have to fill out a withdrawal form to withdraw money from your PPF account.

Withdrawal Process:

  • Download and fill in Form C (PPF withdrawal form) from your bank or post office website

  • Provide account details and the amount to be withdrawn

  • Submit the form at the branch where your PPF account is held

This allows account holders to access funds when needed while continuing to benefit from the long-term savings feature of PPF.

Loan Against PPF:

You can take up a loan against your PPF balance. However, there are certain conditions and some things you must follow:

  • Account holders can avail this loan facility between the third and sixth financial year of opening a PPF account.

  • You must submit Form-D. This form asks for details like account number, loan amount, etc. The form also needs you to affirm that the loan will be paid back with interest within 3 years.

  • You can take a loan up to 25% of the account balance at the end of the second financial year of your PPF account or the year preceding the year in which you applied for the loan.

Interest on Loan Against PPF:

  • If you repay the loan within 3 years, the interest rate of 1% p.a. will be applied. However, the interest rate of 6% is applied if you do not repay the loan within 3 years.

  • You don’t pay the interest rate with the EMIs. You only repay the principal amount through your EMIs. After the principal amount is repaid, you have to pay the interest amount within the next two months.

How to Close a PPF Account?

You can close your Public Provident Fund account only after completing the initial tenure of 15 years. To close your account, follow these steps:

  • Fill out Form 10C. Attach your PPF account passbook to it.

  • Submit this form and passbook to the relevant post office branch.

  • Your PPF account will be closed after your application is processed.

After you close your PPF account, your payment will be deposited in the savings account that you have linked with your PPF account.

How to Retrieve an Inactive PPF Account?

Your account will be considered inactive if you don’t deposit at least ₹500 in your Public Provident Fund account in a year. You can retrieve your inactive PPF account.

  • Firstly, you have to submit a written application letter requesting to reactivate your PPF account. You have to submit this to the post office or the bank.

  • You have to pay ₹50 as a fine for each year of inactivity.

  • You have to deposit a minimum of ₹500 for all the years your account has been inactiv

How to Extend a PPF Account after Maturity?

After the completion of the first 15 full financial years, your PPF account is ready for maturity and full withdrawal. After this, you can either choose to extend your PPF account with or without contributions in blocks of 5 years.

If you don’t take any action after maturity, your account will continue without any need for further contribution. You can choose to extend the tenure up to 5 years with an annual contribution if you want to invest more in PPF.

To extend your PPF account with a contribution, you need to fill out Form H with a request to extend the tenure.

Alternatives for PPF

Equity Linked Saving Scheme (ELSS)

  • Pure equity diversified mutual fund

  • Offers tax benefits under Section 80C

  • Minimum lock-in of 3 years for each investment

  • No limit on investment, minimum investment can start from ₹500

Unit Linked Insurance Plans (ULIPs)

  • Made for serving any long-term goal. Invest in a flexible portfolio of equity and debt funds

  • Best for meeting important life goals of children or family members

  • Offers a life cover and protection for investment

  • Bonus additions for long-term disciplined investors

  • Minimum lock-in of five years

  • The maximum tenure is up to 99 years of age (only in whole life ULIPs)

National Pension Scheme (NPS)

  • Made for serving retirement savings goals

  • Allows investment in managed portfolios of equity, debt and alternative assets

  • Partial withdrawals are allowed only after 60 or superannuation

  • Tax benefits of up to ₹2 lakh per year

  • Your employer can also contribute to your account

National Saving Certificate (NSC)

  • A flexible investment scheme with a sovereign guarantee and a good rate of interest

  • The maturity period is five years

  • Tax benefits under Section 80C

Sukanya Samdriddhi Yojana

  • A dedicated government-backed savings scheme designed exclusively for the girl child

  • Tax benefits under Section 80C + tax-free interest

  • The account matures when the daughter turns 21, giving her full ownership of the corpus

  • Offers protection from the attachment under court orders

ULIPs and NPS accounts have been a fair competition for PPF accounts. However, PPF has been the most popular scheme due to its flexibility. We highly recommend PPF over other options available.

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Did You Know?

PPF accounts are protected from court attachment, meaning creditors generally cannot claim your balance to recover debts


Source: ET Money

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PPF - Tax Benefit

One of the biggest advantages of a PPF account is its strong tax benefit. The Exempt-Exempt-Exempt (EEE) category includes PPF as one of the investment instruments. This indicates that all PPF deposits are tax-deductible under Section 80C of the Income Tax of India. It is important to remember that the maximum contribution to PPF in a single financial year can be ₹1.5 lakhs. 

In addition, the total amount accumulated and the interest are tax-free at the moment of withdrawal. Moving a PPF account from one point of designation to another is possible. However, keep in mind that you cannot prematurely close a PPF account. The nominee is only permitted to request account closure in the event of the account holder's passing.

PPF vs. ELSS: Which is Better for Tax-Saving?

Both ELSS and PPF are closely related to future savings and investment planning, where ELSS is a type of mutual fund that focuses on investment in equities, also called stocks. Meanwhile, PPF is a government-guaranteed return concerned more with long-term savings.

Features

Public Provident Fund (PPF)

Equity-Linked Savings Scheme (ELSS)

Tenure

The lock-in period here is 15 years, which is only extendable on a block of 5 years

ELSS comes with a lock-in period of only 3 years, which is the shortest among tax-saving instruments under Section 80C

Investment Limits

The minimum investment starts at ₹500 and can exceed up to ₹1.5 lakh per annum.

There is no upper limit on investment. However, under Section 80C of the Income Tax Act, only ₹150,000 in a financial year is deductible.

Returns

The government can periodically revise and determine the interest rate, which is currently at 7.1% per annum

ELSS is market-linked and can offer higher returns than PPF, but comes with higher risk

Tax Benefits

The PPF investments are eligible for Section 80C deductions of the Income Tax, and the interest earned and the maturity amount are also tax-free. 

ELSS investments are eligible for tax deductions under Section 80C, but the Long-term Capital Gains (LTCG) are taxed at 10% if they exceed ₹1 lakh

The choice between the two depends solely on the expectations and risk appetite of the policyholder. Moreover, the time frame plays an essential role, along with the tax benefits. Therefore, choose wisely!

Common PPF Myths & Misconceptions

Even though PPF is popular and pretty lucrative, there are some common assumptions that have been associated with it. Here is an overview of what these misconceptions are and how they can change your perspective on whether you should or should not invest in them.

  • Risk Factor: Some believe PPF is entirely risk-free. Now, although it is backed by the government, its interest rates are subject to change every quarter, which means that its returns can differ from what you may expect.​

  • Returns Comparison: It's a common myth that ELSS always offer you higher returns compared to PPF. However, ELSS has its market linkage, which, in fact, carries a higher risk.​

  • iquidityL: It is a long-term savings option with a 15-year lock-in period. You can make partial withdrawals after a few years under certain conditions, but full access to the money is restricted, so liquidity is limited.

Wrapping Up

PPF, or Public Provident Fund, offers financial security and long-term planning for its users, providing them with stability and growth over time. With a minimum investment, you can begin to sow the seeds of a prosperous tomorrow. 

As the maturity period approaches, you will realise that this disciplined investment has transformed into a substantial corpus, ready to support your dreams, be it a home, education, or retirement. The PPF nurtures their financial aspirations and instils a sense of responsibility and foresight. By choosing to invest in the PPF, you get a long-lasting financial foundation, illustrating how small, consistent efforts can lead to significant rewards over time.

Glossary

  1. Sovereign Guarantee: A guarantee given by the government to a lender, promising to pay back the loan if the borrower defaults
  2. Form D: A prescribed format used to submit certificates of work experience or performance reports for government tenders
  3. EEE Category: An investment category where the investment, growth, and maturity proceeds are all tax-exempt
  4. Lock-in Period: The fixed duration during which full withdrawal is restricted to encourage long-term savings discipline
  5. Partial Withdrawal: A facility allowing limited withdrawal from the PPF fund after a specified period without closing the account
glossary-img
Uncertain About Insurance

FAQs

As per the recent amendments to PPF account rules, you cannot have more than one PPF account. If you have more than one PPF account in your name, both accounts will be merged into one. You can choose which account to continue after the merger.

Yes. You can write a request to reactivate your Public Provident Fund Scheme account with the bank. The fine for the inactivity of the account will be ₹50 per year for all inactive years. Along with that, you have to deposit a minimum of ₹500 for all the years in which your account has been inactive.

The minimum lock-in period in the PPF scheme is 15 years. This tenure can be extended in blocks of 5 years after reaching maturity.

No. You can choose to extend the tenure in blocks of 5 years with further contributions, or you can choose to extend the PPF account without further contributions.

There’s no limit to that. You can extend your PPF account tenure as many times as you want. However, you can only extend it in blocks of 5 years at a time.

A PPF account is a government-backed long-term savings option that helps build a secure corpus with tax-free returns and disciplined contributions over 15 years.

Yes, they are closely related but not the same. The PPF scheme is the government-backed savings programme, while a PPF account is the individual account you open to invest in that scheme.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

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