What is PPF ? Public Provident Fund

What is PPF ?

PPF (Public Provident Fund) is a saving-cum-tax saving scheme in India (started in 1968 by National Saving Institute of the Ministry of Finance) by Central Government. The goal is to mobilize small savings by offering an investment with reasonable returns combined with income tax benefits. (Tax exemption : EEE)

 

The interest rate is 8% per annum (compounded annually) and it's tax free (contribution under 80C and interest earned is fully exempted without any limit). Anyone individual Indian resident(including minor but not NRIs) can open an account with any nationalized bank (SBI, PNB, Central Bank of India etc) or post office or some authorized private banks (ICICI, HDFC, Axis Bank etc). The duration is 15 years and one can deposit anywhere between Rs. 500 (minimum) to 1.5 lac (maximum) per year.

Some Facts About PPF

• Current interest rate : 8%
• Duration of scheme : 15 years
• Minimum deposit amount (per year) : 500
• Maximum deposit amount (per year) : 1,50,000
• Number of installments every year : 1 (Min) to 12 (Max)
• Number of accounts one can open : 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 (contribution) : under section 80C (upto 1.5 L)
• Tax savings (interest earned and final amount) : fully exempted from wealth tax

  

 

Year	Opening Balance	Amount Deposited	Interest Earned	Closing Balance	Loan (Max.)	Withdrawal (Max.)
1	0	150000	12000	162000	0	0
2	162000	150000	24960	336960	0	0
3	336960	150000	38957	525917	40500	0
4	525917	150000	54073	729990	84240	0
5	729990	150000	70399	950389	131479	0
6	950389	150000	88031	1188420	182498	0
7	1188420	150000	107074	1445494	0	262959
8	1445494	150000	127640	1723134	0	364995
9	1723134	150000	149851	2022985	0	475195
10	2022985	150000	173839	2346824	0	594210
11	2346824	150000	199746	2696570	0	722747
12	2696570	150000	227726	3074296	0	861567
13	3074296	150000	257944	3482240	0	1011493
14	3482240	150000	290579	3922819	0	1173412
15	3922819	150000	325826	4398645	0	1348285

 

 

Happy Investing