PPF Account Guide: Rates, Rules & Tax Benefits Explained
The Public Provident Fund (PPF) remains one of India's most powerful tax-saving instruments — it offers 7.1% interest per annum (Q1 2024, set quarterly by the government), full tax exemption at all three stages (contribution, accumulation, and withdrawal), making it EEE-status. You can invest a minimum of ₹500 and a maximum of ₹1.5 lakh per year, with contributions qualifying for deduction under Section 80C. The 15-year lock-in makes it ideal for retirement or children's education planning.
Frequently asked questions
Quick answer
Can I withdraw money from PPF before 15 years?
Partial withdrawal is allowed from the 7th financial year onwards — you can withdraw up to 50% of the balance at the end of the 4th year or the preceding year, whichever is lower. Full premature closure is only permitted in specific cases like life-threatening illness or higher education, and only after 5 years.
Can I withdraw money from PPF before 15 years?
Partial withdrawal is allowed from the 7th financial year onwards — you can withdraw up to 50% of the balance at the end of the 4th year or the preceding year, whichever is lower. Full premature closure is only permitted in specific cases like life-threatening illness or higher education, and only after 5 years.
Where can I open a PPF account in India?
PPF accounts can be opened at any SBI branch, select nationalised bank branches (PNB, Bank of Baroda, etc.), and all post offices. Many banks — including SBI, HDFC, and Axis — also allow online PPF account opening through net banking.
Is PPF better than FD for tax saving in India?
PPF has a significant advantage — interest earned is completely tax-free, while FD interest is taxable as per your income slab. A taxpayer in the 30% slab effectively earns ~5% post-tax on a 7% FD, versus the full 7.1% on PPF. PPF is better for long-term goals if you can tolerate the lock-in.
What happens to my PPF account after 15 years?
After maturity, you can withdraw the full amount tax-free, extend for another 5 years without making fresh contributions (and continue earning interest), or extend with fresh contributions in 5-year blocks indefinitely. Extending is often beneficial as compounding continues on a large corpus.