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PPF: What Are The PPF Benefits And Features

Personal Finance

PPF, or Public Provident Fund, is one of India’s most popular investment schemes for people of all ages. PPF not only gives a good rate of interest that allows your money to grow quickly but is also safe. This is because PPF comes with a government guarantee, where the return on investments in PPF is assured. With safety and fast growth, PPF offers investors the best of both worlds.

What is PPF?

PPF, or Public Provident Fund, was introduced in India in 1968. For 54 years, PPF has been the go-to savings-and-tax-saving instrument of choice for millions of Indians.

The Government of India revises PPF interest rates every year, and usually, the interest rate on PPF post office accounts is higher than on fixed deposits (FDs).

The rate of interest offered on PPF accounts right now is 7.1%. And the minimum lock-in period for a PPF account is 15 years.

Benefits of PPF

PPF is a favourite savings instrument because it affords the following benefits:

  • For Everyone: There is a cap on the maximum amount of money you can invest in PPF (Rs 1.5 lakh). The minimum amount for PPF is so low that almost everyone can afford it. The lowest amount you can invest in your PPF is only Rs. 500 per year.
  • Emergency-friendly: Need urgent money? Maybe an illness at home or an expense has caught you by surprise. You can count on your PPF account to tide through the crisis. You can avail of loans against your PPF account from the 3rd financial year to the 6th financial year.
  • It’s your money – make it large or small: PPF also allows you to draw money from the seventh financial year.
  • Tax-saver: The deposit you make in your PPF account, with a cap of Rs 1.5 lakh a year, qualifies for deduction under Section 80-C of the Income Tax Act. Further, interest earned on your PPF investment is free from income tax under Section 10 of the I-T Act.     
  • Very safe: You don’t need to be told again that mutual fund investments are subject to market risks. The same is the case with most other options that offer similar returns. But not your PPF account. Not only do PPF accounts come with a government guarantee, but the amount in your PPF account also cannot be attached under any order or decree by a court of law.    

PPF Features

Now that you know the benefits of having a PPF post office account, here’s a glance at PPF features:

PPF interest rates

How is the PPF interest rate decided?  

The Government of India decides on the rate of interest on PPF investments every quarter. The PPF interest rate for the third quarter of the 2022-23 financial year (October 1 to December 31, 2022) is 7.1%.

How is PPF interest calculated?

PPF interest is calculated based on the lowest PPF balance in the account after the 5th day of a month to the final day of the month.

When is PPF interest paid out?

Interest accrued on PPF investments will be credited to your PPF account at the end of every financial year.

PPF investments

How much money do I need to open a PPF post office account?

You can open a PPF account with a minimum yearly investment of Rs 500 only.

Is there a cap on the amount of money I can invest in PPF?

Yes. You can invest a maximum of Rs 1.5 lakh in your PPF account.

PPF tax saving

How much tax can I save by opening a PPF account?

The money you invest in your PPF account is exempt from Income Tax under Section 80-C of the Income Tax Act. Therefore, the entire amount is exempt from income tax if you invest a maximum of Rs. 1.50 lakhs, in your PPF account. Moreover, the interest earned from your PPF investment is also exempt from income tax.

PPF lock-in period and withdrawal

How long do I have to keep my money in a PPF account?

The minimum lock-in period for a PPF account is 15 years. Additionally, you can extend your PPF account for as long as you want in blocks of 5 years.

Can I withdraw my PPF money before 15 years?

Yes. But only in case of emergencies. You can withdraw money from your PPF account from the 7th financial year since you opened your PPF account.

What if I need my PPF money before 7 years?

You will not be able to withdraw money from the year PPF account before the 7th financial year since you opened the account. However, you will be able to obtain loans against your PPF account from the 3rd to the 6th financial year from when you opened your account.

PPF Pension

There is some confusion in the investment market about whether PPF provides pensions to account holders. If you are confused, please know that PPF does not provide any pensions to investors. PPF, or Public Provident Fund, is a government-backed savings instrument only. It is not a pension or retirement-specific vehicle.

How to open a PPF account?

Now that you know PPF benefits and various features of opening a PPF account, here’s a glance at how to open a PPF account. PPF accounts can be opened at post offices, nationalized banks, and major private banks.

Documents required to open a PPF account:

  • PPF account opening form. The form can be obtained from any bank authorized to open a PPF account.
  • KYC documents: Aadhaar, voter ID card or driving license.
  • Address proof.
  • PAN Card.
  • Passport-sized photograph.
  • Nomination form – Form E. This can also be obtained from the bank.
  • With all these documents in order, you can submit your form, and you now have a PPF account.


PPF is one of the best saving options for risk-free investors. People widely use it to create a retirement corpus. If you want to learn more about PPF and its benefits, visit Piramal Finance. They have some great blogs and articles on PPF to help you acquire updated financial skills.