Question 1

What is PPF (Public Provident Fund)?

Accepted Answer

PPF is a government-backed long-term savings scheme with 15-year tenure. It offers guaranteed returns at 7.1% interest (current rate), compounded annually. Key features: EEE tax status (exempt at all stages), minimum ₹500/year deposit, maximum ₹1.5 lakh/year, can be opened at post offices or banks.

Question 2

What is EEE tax benefit in PPF?

Accepted Answer

EEE means Exempt-Exempt-Exempt: (1) Deposits up to ₹1.5L are exempt under Section 80C, (2) Interest earned is exempt from tax, (3) Maturity amount is completely tax-free. This makes PPF one of the most tax-efficient investment options in India.

Question 3

What is the current PPF interest rate?

Accepted Answer

The current PPF interest rate is 7.1% per annum (as of FY 2024-25). The rate is set by the government and revised quarterly. Interest is compounded annually at the end of each financial year (March 31). Historical rates have ranged from 7% to 12%.

Question 4

What is the minimum and maximum investment in PPF?

Accepted Answer

Minimum: ₹500 per year (must deposit at least once yearly to keep account active). Maximum: ₹1,50,000 per year (deposits above this don't earn interest and are returned). You can deposit in lumpsum or up to 12 installments per year.

Question 5

Can I withdraw from PPF before 15 years?

Accepted Answer

Partial withdrawal is allowed from 7th financial year onwards (after completing 5 years). You can withdraw up to 50% of balance at the end of 4th year or previous year, whichever is lower. Premature closure is allowed only for medical emergencies or higher education after 5 years.

Question 6

Can I get a loan against my PPF account?

Accepted Answer

Yes, loan facility is available from 3rd to 6th financial year of the PPF account. Maximum loan: 25% of balance at the end of 2nd preceding year. Interest rate: 1% above PPF rate. Loan must be repaid within 36 months. No loan after partial withdrawal starts.

Question 7

What happens after 15 years PPF maturity?

Accepted Answer

At maturity you have 3 options: (1) Withdraw full amount tax-free, (2) Extend by 5 years with contributions (continue deposits up to ₹1.5L/year), (3) Extend by 5 years without contributions (existing balance earns interest). Extensions can be done multiple times.

Question 8

How is PPF interest calculated?

Accepted Answer

PPF interest is calculated on the lowest balance between 5th and end of each month. Formula: Interest = (Lowest balance × Rate) / 12, calculated monthly but credited annually on March 31. To maximize interest, deposit before 5th of the month, ideally in April first week for full year.

Question 9

Can NRIs open or continue PPF account?

Accepted Answer

NRIs cannot open new PPF accounts. Existing accounts opened when resident can be continued until maturity (15 years) but cannot be extended. Interest continues to be credited. After maturity, account must be closed. Some banks may apply different rules.

Question 10

PPF vs FD - Which is better?

Accepted Answer

PPF is better for: Long-term goals (15+ years), tax savings, risk-free guaranteed returns. FD is better for: Short-term goals, flexibility in tenure, partial withdrawal ease. PPF offers ~7.1% tax-free vs FD ~7% taxable (effective ~5% after tax for 30% bracket).

Question 11

Can I open PPF for my child?

Accepted Answer

Yes, you can open PPF for minor child. But there's a combined limit - total deposits in your account + child's account cannot exceed ₹1.5 lakh per year. When child turns 18, they can operate the account independently. Only one PPF account allowed per person.

Question 12

What happens if I don't deposit minimum amount in PPF?

Accepted Answer

If you don't deposit minimum ₹500 in a year: (1) Account becomes inactive/discontinued, (2) To revive: pay ₹500 per year for missed years + ₹50 penalty per year, (3) Balance continues to earn interest even in inactive account, (4) Revival must be done before maturity.

PPF Calculator

PPF Investment Details

Maturity Summary

What is PPF (Public Provident Fund)?

PPF Benefits

🛡️ EEE Tax Status

📈 Guaranteed Returns

💰 Section 80C

🔄 Loan Facility

PPF Tips for Maximum Returns

Frequently Asked Questions