Public Provident Fund Compare

Additional Useful Information

• The minimum amount required to open a PPF account is ₹100. A minimum of ₹500 can be contributed to the account. Contributions are allowed only in multiples of 100.

• The maximum contribution as to how much an investor can invest in this scheme is ₹1,50,000.

• Contributions can be made at any time of the year.

• PPF matures within 15 years of starting the account. However, there is an option of extending the maturity by 5 years up to a total of 50 years. If the amount is not withdrawn on maturity, the PPF account tenure is automatically extended.

• PPF account can be opened at any age. There is no age restriction.

• Withdrawal terms are as follows:
• Premature Exit/Closure:
• This is permissible only after 5 years of account opening.
• This is permissible only for educational and medical purposes.
• The entire amount can be withdrawn.
• At Maturity:
• The entire amount can be withdrawn when the PPF account matures.
• After 5-year extension:
• PPF amount can be withdrawn up to the amount that was accumulated when the PPF matured at 15 years.
• Only one withdrawal per year can be made in this case.
• Partial Withdrawal:
• This is permissible only after 6 years of account opening.
• However, only 50% of the total current balance in the PPF account can be withdrawn.

Returns *

• PPF generates 7.1% returns yearly.

• The Government of India decides the interest rate for the PPF Scheme.

• Since the interest is guaranteed and backed by the Government of India, PPF is one of the safest and most popular investment schemes.

Risk Level

• PPF is a risk-free scheme since interest is guaranteed and the scheme is backed by the Government of India.

• However, since the scheme is risk free, it may not offer returns offered by other traditional investment classes such as bonds, NCDs, equity, etc.

Liquidity

• Premature Exits are allowed only for educational and medical purposes after a minimum lock in period of 5 years making PPF a very illiquid scheme.

• Investors can look at ‘additional useful information’ to know more about the withdrawal terms.

Interesting Facts

• The investment in this scheme can be pledged as collateral for loans subject to terms and conditions of the lending institution.

• Interest rates are updated quarterly by the government.

Tax Implications

• PPF is an entirely tax-free scheme.

• Any interest received from PPF account is tax free.

• Any amount received at maturity is tax free.

• Under section 80C of the Income Tax Act, investors are eligible for a maximum tax deduction of ₹1,50,000. Investing in PPF can be done to claim the deduction.

Where To Invest

• https://bankofmaharashtra.in/ppf-scheme

• https://www.nsiindia.gov.in/(S(mdpvo045ftkrvy55izvzhwve))/InternalPage.aspx?Id_Pk=55