What is PPF Account and How it Works


PPF stands for Public Provident Fund, was inaugurated in 1968. It’s a tax-free and safe investment scheme that released with a tenure period of 15 years. The two important features that make this scheme more assured and popular is that it offers fixed internet rates with guaranteed returns. In a regular interval of time, individuals need to invest between Rs. 500 to Rs. 1.5 lac in a financial year. This investment instrument gives you the flexibility to choose the lump- sum amount to invest. The interest rate on PPF Account is updated by the government every quarterly, now as per the government guidelines, the current PPF interest rate provided by all banks is 8%, but it will be changed in upcoming months.

How PPF Account Work?

PPF comes with an aim to provide saving and assured investors that they are investing in the risk- free direction. This scheme helps the general public of India by offering convenient installments feature. The account of PPF can be activated by investing a minimum Rs 500 up to 1.5 lakh per financial year. The lock-in period of PPF is 15 years, so PPF account holder cannot withdraw money before the maturity period. Though, they can redeem fund after 7 years as per their choice. There is no restriction on how many times individuals can invest, but as we mentioned above, the investment fund must be minimum Rs. 500 to a maximum of 1.5 Lakh.

PPF Interest Rates

As per the government guidelines, the current PPF interest rate is 8.5% per financial year. The biggest advantage of this scheme is that it falls under the EEE category, which simply means, all the fund deposited in the PPF is tax-free. But, make sure the PPF account cannot be terminated permanently. Investors can evaluate the PPF- related calculation as interest rate earned, returns till maturity period with the help PPF interest calculator and PPF account calculator.

PPF Account Facts

Interest Rate 7.6% Per Anum
Duration of Scheme 15 Years
Minimum Yearly Deposit ₹500
Maximum Yearly Deposit ₹1,50,000
Installments Every Year 1 (Min) to 12 (Max)
Number of Accounts Allowed Only One
Lock-in Period 15 years (partial withdrawals can be made from the sixth year)
Extension of PPF Account After the maturity period (15 years), it can be extended for a period of 5 years
Tax Savings on Premium under section 80C (upto 1.5 L)
Tax Savings on Maturity Amount fully exempted from wealth tax

How to Open PPF Account?

Individuals can open a PPF account with either post office or private banks and nationalized banks. In order to access the PPF, all you need is to fill the dull registration form and submit some documents like identity proof, address proof, signature proof,  passport size photos, and saving account number. If you haven’t used net banking, you can fill the form for it that is available on your respected bank website.

PPF Calculator

Individuals who are investing in PPF, they must have some basic knowledge about the PPF calculator. It’s an instrument which is used to calculate the return, interest rates over the maturity period, even it’s also all PPF related calculation issues. Mainly, PPF interest calculator and PPF account calculator are often used by the investors. The purpose of the PPF calculator to estimate the interest value over the period of 15 years and PPF account calculator is to get a total investment value.

Download PPF Calculator

Types of PPF Calculators

There are seven types of calculators which assist you to compute various types of calculations over PPF amount. They are as follows:

  1. PPF fixed monthly investment calculator
  2. PPF fixed yearly investment calculator
  3. PPF variable yearly investment calculator
  4. PPF Benefits calculator
  5. PPF available loan calculator
  6. PPF available withdrawal calculator
  7. PPF maturity calculator

Benefits of PPF Account

  • Individuals can get a loan against the account for any purpose. But this facility reduces your balance amount.
  • Individuals have access to change the nominee name.
  • Income-tax free benefit.
  • With the help of PPF calculator, you can estimate the interest value.
  • At the end of the 4th year, you can withdraw 50% fund value.

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