PPF Account – Opening of PPF Account, Required Documents & Withdrawal


A public provident fund (PPF) account is a long-term saving investment option which was launched in 1968 by the National Savings Institute (a segment of the Ministry of Finance). PPF account is very popular among small investors due to its flexible investment nature, with an attractive rate of interest and also provides tax benefits.

What is a Public Provident Fund Account?

Public Provident Fund (PPF) account is the facility launched by the Finance Ministry, for all kinds of investors to invest in the long term with a flexible investment method. Which offers tax benefits with an attractive rate of interest. The Post Office and many nationalized banks offer PPF account facility.

How to open a Public Provident Fund Account? 

PPF facility is available at Post Office or nationalized banks like SBI, PNB or HDFC, so anyone can open their PPF account by submitting their documents.

Documents you need to submit to open your PPF account:

  • You need ID Proof like Aadhaar Card, Pan Card, etc.
  • You need current address proof
  • You need a Signature proof
  • You need to fill and submit a PPF account form

After submitting all the details in the Post office or Bank you will receive your will and your account details and you can start investing.

Who can open a PPF account?

PPF account can be opened by any individual who is having all the documents mentioned above. Hindu Undivided Families and Non-resident Indians are not allowed to open a PPF account.

PPF Deposit Details

The charges of opening a PPF account is only Rs. 100 and in order to keep your account active, you need to deposit at least Rs. 500 every year for 15 years.

The minimum limit to deposit in PPF account is Rs. 500 in a year and the maximum amount you can deposit is up to Rs. 1,50,000 in a year which can be done through multiple deposits (maximum 12).

Interest on Public Provident Fund account 

The current rate of interest is determined by the Central Government. PPF account is 7.90% per annum with effect from 01.10.2019 and it is compounded on an annual basis. The interest is calculated on the minimum balance that is available between the close of the fifth day and last day of every month.

Features of a Public Provident Fund account 

    • Investment Flexibility: In PPF account you can deposit a minimum of Rs.500 to a maximum of Rs.1,50,000 in a financial year. Investment can be done with a maximum of 12 instalments or in one time.
    • Duration: The actual duration of PPF is 15 years. But individuals can extend the duration for 1 or more blocks of 5 years each.
  • Deposit: In PPF account you can deposit the amount through several ways like Cash, Cheque or Online.
  • Risk-Free: PPF accounts offer guaranteed returns and there is 0% chance of capital loss.
    • Tax Benefits: Income Tax benefits are available under Sec 88 of the Income Tax Act.
    • Nomination: PPF account also provides nomination facility to the account holder.
    • Account Transfer: You can transfer your PPF account to other branches/ other banks or Post offices.
    • Loans against a PPF account: You apply for a loan against PPF account depending upon the age (3 to 5 years old account) of the account and balance.
  • Compound Returns: In PPF account you will earn compound interest in your deposit. 

Public Provident Fund Withdrawal 

AS a rule, PPF accounts have a lock-in period of 15 years. After completing 15 years you can close your PPF account and the entire amount with interest can be withdrawn. But in case of emergency individuals can premature withdrawals from the PPF account.

  • PPF premature withdrawal can be done after completing 7 years from the account opening date.
  • Individuals can prematurely withdraw up to 50% of the closing balance at the end of 4th year.
  • Individuals can withdraw only once in a financial year.

Withdrawal procedure for PPF:

  • To withdrawal your PPF amount completely or partially you need to submit Form C to your branch where your account lies.
  • You need to provide your PPF account details and purpose in case of premature withdrawal in Form C.
  • You need to provide your account details to credit the amount of your PPF account in Form C. 

Tax benefits in the Public Provident Fund 

The investment done by the investor in a PPF account comes under Sec 88 of the Income Tax Act which means all investments done under a PPF account are deductible under Section 80C of the Income Tax Act.

Online PPF Facility

There are many services that can be done through online related to PPF accounts some mentioned below:

Account Opening: Now you can open a PPF account online. You just need internet banking with that you can apply for PPF through net banking.

Check Balance: With the help of Internet Banking you can check your PPF balance. You can check your contribution, interest earned, etc.

Online PPF Calculator: Through online calculator, you can calculate your investment, your return and your withdrawal limit.

How to Reactivate PPF Account?

In case you fail to deposit a minimum amount in your PPF account, it will be deactivated. In order to reactivate your PPF account, you need to pay a fine of Rs. 50 for each year when the minimum deposit is not done.

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