PPF Account | Meaning, Benefits, Opening & Withdrawal Process

What is PPF?

PPF or Public Provident Fund is a popular long-term investment scheme in India, backed by the Central Government, aimed to promote long-term saving scheme for General public & provide them income security in future. You can avail the tax benefits under Section 80C of the Income Tax Act In PPF account balance. The maturity period is 15 years, and it’s known for its attractive interest rates with stability & government Guarantee.

History of PPF

Public Provident Fund is a tax saving & long-term investment scheme launched by National Saving Institute under the guidance of Ministry of Finance in 1968.

Features Of PPF

1. Risk Profile: – PPF (Public Provident Fund) is backed by central government for guaranteed returns with fix rate of interest.
2. Rate of Interest: – Currently Rate of Interest on PPF account is 7.1% per annum.
3. Investment Amount: – A person can invest minimum Rs.500 & maximum Rs.1,50,000 in PPF account.
4. Duration: – The maturity period of PPF account is 15 years. You are allowed to withdraw the funds before maturity in several condition.
5. Tax Concern: – Investor can apply for tax exemption for amount invested in PPF account under the section 80C.

Eligibility for PPF account

Any Indian Citizens can open a PPF account in his/her name, minors can also open PPF account by their name under the guidance of their parent.
Non-Residence Indian are not allowed to operate a PPF account by their name.

How to Open PPF account?

Most of the banks in India have PPF account service online & offline, a general public can easily open a PPF account by bank website or offline by visiting bank or post office. You just need few important documents,
a. Proof of Identity: – Aadhar Card, Pan Card, Voter ID, Passport etc.
b. Proof of address: – Aadhar Card, Passport, Utility bill or rental agreement.
c. Passport Size Photo
d. Account Opening Form
e. Nominee Details

How to Withdraw Funds from PPF Account?

1. After the Maturity: – You are allowed to withdraw complete PPF account balance after the 15 years of initial invested. You can also extend the PPF account for more 5 years without investing new amount.
2. Premature withdrawal: – You are allowed to withdraw up to 50% of PPF account balance after 7 years of initial investment and only 1 partial withdrawal are allowed in 1 financial year from PPF account.
3. Premature Closure: – You are allowed to close the PPF account before the maturity date in any emergency case like, medical or education.
4. Form C: – You have to submit the Form C for PPF account withdrawal. The form C will available in Bank or Post office. You have to mention the PPF account details, amount, signature & revenue stamp.