Post Office PPF Scheme Guide

Post Office Public Provident Fund (PPF) Scheme

The Post Office Public Provident Fund (PPF) is a long-term, government-backed savings scheme offering tax-free interest, safe growth, and flexibility for individuals looking to build a secure financial future while enjoying tax benefits under Section 80C.

Key Highlights

✅ 7.1% per annum (compounded yearly)
✅ Tax-free returns under the Income Tax Act
✅ Minimum investment: ₹500/year, maximum: ₹1.5 lakh/year
✅ Flexible deposits in lump-sum or installments
✅ Safe, government-backed, long-term growth

Latest Interest Rate (From 01 Jan 2024)

7.1% per annum (compounded annually)

Salient Features

(a) Who Can Open:

Any resident Indian adult in their own name
A guardian on behalf of a minor or a person of unsound mind

Note: Only one PPF account allowed per individual across all banks and post offices in India.

(b) Deposit:

Minimum deposit: ₹500 per financial year
Maximum deposit: ₹1.5 lakh per financial year, inclusive of deposits made in the minor’s account
Deposits allowed in lump-sum or installments (in multiples of ₹50)
Deposits can be made by cash or cheque (date of realization is considered as deposit date)
Eligible for tax deductions under Section 80C

(c) Discontinuation and Revival:

If the minimum deposit of ₹500 is not made in a financial year, the account becomes discontinued
Discontinued accounts cannot avail loans or withdrawals
Can be revived before maturity by paying the minimum deposit plus ₹50 penalty per defaulted year

(d) Interest:

Calculated on the lowest balance between the 5th and the last day of the month
Credited at the end of each financial year
Interest earned is completely tax-free

(e) Loan Facility:

Loans available from the 3rd financial year to the end of the 6th financial year
Up to 25% of the balance at the end of the 2nd year preceding the year of loan
Only one loan can be taken in a financial year, with no second loan until the first is repaid
If repaid within 36 months, interest at 1% per annum applies; if repaid after 36 months, 6% per annum applies

(f) Withdrawal Facility:

Partial withdrawals allowed after 5 years (excluding the year of account opening)
One withdrawal per financial year, up to 50% of the lower of:
- Balance at the end of the 4th preceding year
- Balance at the end of the preceding year

(g) Maturity:

The PPF account matures after 15 financial years (excluding the year of opening)
Options on maturity:
- Withdraw the entire maturity amount
- Continue earning interest without additional deposits and make one withdrawal per year
- Extend in blocks of 5 years with fresh deposits (application required within 1 year of maturity)
Discontinued accounts cannot be extended

(h) Premature Closure:

Allowed after 5 years under specific conditions:

For the treatment of life-threatening diseases of the account holder, spouse, or dependent children
For higher education of the account holder or dependent children
In case of a change in the account holder’s residential status (becoming NRI)

1% interest will be deducted from the applicable rate at the time of closure.

(i) On Death of the Account Holder:

The account is closed upon the death of the account holder
Nominee/legal heirs cannot continue the account
Interest is payable up to the month preceding the closure

Why Choose Post Office PPF?

✅ Safe, government-backed investment
✅ Ideal for long-term wealth creation
✅ Completely tax-free returns
✅ Loan and partial withdrawal facilities for liquidity
✅ Perfect for retirement and future planning

The Post Office PPF Scheme is your trusted, long-term investment companion, ensuring your money grows safely while offering tax-free returns and flexible liquidity options to secure your financial future.

Start your PPF investment today for a stress-free tomorrow.