Hi friends, in this article we will discuss everything about PPF. You will get the answer to this simple question is, “What Is A PPF Account?”I will keep this article in Q&A form to cover maximum questions, thereby clearing all doubts. 

The first question to start with is:

What is a PPF account?

PPF or Public provident fund is a central government-backed saving cum investment scheme that can be opened in Bank and Post Office. It was first offered to the public in the year 1968 by the finance ministry National saving institute. 

Reason for popularity of PPF?

Some of the critical reasons being:

  • Safest investment as the Government of India guarantees it.
  • Its interest rate is more than most of the FD’s and debt funds. 
  • Double tax benefit means you will get a tax rebate in 80C as well as not tax will be levied while withdrawing at the time of maturity.


What Is A PPF Account?

What is the essential feature of PPF?

  • You can invest a minimum of Rs 500 and a maximum of Rs 150000 in a financial year.
  • PPF has a tenure of 15 years, and if we want to extend it, we can open it in a five-year extension for a lifetime. 
  • It is only eligible for Indian citizens.
  • You can open a PPF account for Rs 100, and you can invest any amount starting from 100 to 1.5 lacs in a financial year.
  • You can take a loan on behalf of your PPF account after investing for a minimum of 3 years. Loan eligibility starts from 3 years, and it goes in multiple years of 3,5, 7, etc.
  • A minimum deposit of Rs 500 in financial is mandatory. 
  • The government of India guarantees this instrument with the best ROI in its segment, making it an essential part of the investment for every Indian. 

How Safe is PPF?

PPF is a 100% safe instrument. It is considered the safest investment as even if somebody becomes a defaulter, even, in that case, his PPF account will not get attached as per court order. In a time of extreme uncertainty, only PPF is there as a reliable resource. 

How Safe is PPF in Bank? IS PPF comes under the 5 L security of DICGC?

PPF is entirely safe as the DICGC involves saving FD and interest. The bank is just a facilitator in PPF. The central government takes full responsibility for this financial instrument. That’s the reason you open PPF in government Bank Private Bank Post Office it hardly Matters.

What are the Post Office PPF Account Rules?

  • Only one account can be open across the nation. It can be in Bank or Post office. 
  • The minimum amount of Rs 500 and 1.5 lacs in a year
  • The penalty of Rs 50 if the minimum amount is not deposited every year.
  • The interest is calculated for a month on the lowest balance in the a/c between the fifth day and the end of the month.

What are the rules for PPF extension?

We need to submit form 4 for the PPF account extension. Previously it was FORM H. You can also extend the PPF account without making any yearly contribution and continue to earn tax-free interest. It would help if you mentioned this in option in form 4.

PPF account can be extended after maturity for deposits within one year of the date of maturity. 

What are the rules of preclosure of PPF accounts?

PPF account can be closed prematurely on change in residency status of the account holder on production of passport and visa or income tax returns. Your account will be closed basis of this only. There is a provision of penalty for NRI if they don’t complete their PPF account. 

Preclosure is allowed after five years basis the following conditions: 

  • In case of life-threatening disease of the account holder, spouse, or dependent children.
  • For higher education of account holders or dependent children.

1% interest shall be deducted from the date of account opening/ date of extension.

  • In case of the account holder’s death, the account shall be closed, and the nominee shall not continue depositing the account.
  • At the time of closure due to death, the interest PPF shall be paid until the end of the preceding month when the account is closed.

Premature Withdrawal

  • A subscriber can make one withdrawal during a financial year after five years, excluding the year of account opening. (if the account opens during 2014-15, the withdrawal can be taken during or after 2021-21).
  • Amount of withdrawal can be taken up to 50%of balance at the credit at the end of the 4th preceding year or the end of the prior year. 

Transfer of PPF accounts

  • You can transfer PPF from :
  1. Bank to PO
  2. PO to Bank 
  3. Bank to Bank 
  • Same rule in PO and Bank 
  • We get better customer care service in the private bank such as HDFC ICICI AXIS etc. They have a dedicated office desk.
  • SBI is the largest BANK with a PPF facility 
  • POST office PPF online transfer required an IPPB account. This takes a 3 step process, which means first we need to transfer funds from saving to IPPB account and then from IPPB account PPF account.
  • Also, for any changes in account in SBI or government bank, we need to visit the home branch, but we can do it from any place in case of private. 


Lastly, I want to admit that PPF is the safest and reliable investment instrument available in the market.

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