What is PPF account and how it works?
Olivia Shea
Updated on February 28, 2026
A public provident fund (PPF) account is an investment option that provides income tax deduction u/s 80C for the amount invested (subject to a limit of Rs 1.5 lakh a year). Interest received is exempt from tax and there is no tax on the amount received on maturity of the account either.
What is PPF rules?
Deposit rules: The PPF minimum deposit is ₹500, while the maximum that can be invested in a financial year is ₹1.5 lakh. If you make any deposit in excess of ₹1.5 lakh in a financial year, the transaction will be automatically rejected. You can make deposits in PPF online, or by cash, cheque and demand draft.
Which PPF account is best?
Banks offer PPF accounts at the rate fixed by Indian Government. Current PPF interest rates offered by SBI, ICICI and all banks is 7.10% as applicable from 1st Jul 2021….PPF Interest Rate.
| PPF Account | Details |
|---|---|
| Lock in period | 15 years |
| Minimum Account | ₹ 500 |
| Tax on PPF interest | Nil, tax exempted |
Who is eligible for PPF account?
Eligibility: Any Indian citizen can open a PPF account either in his own name or on behalf of a minor. But, you can’t open a joint account or one for a Hindu Undivided Family (HUF). Also, an individual can have only one account in his name.
What is better PPF or FD?
The tax-saving FDs have a lock-in of 5 years, which is much lesser than PPF. But FDs go carry some risk and also the interest you earn is taxable. So, if you are ok with a 15 year lock-in then PPF can be a good option keeping all things in mind.
Can we deposit 100 rupees in PPF?
The initial deposit amount required to open a PPF account is Rs. 100 and the annual deposit amount is between Rs. 500 to Rs. 1.5 lakh p.a. The customers also have the flexibility to decide whether they want to make any extra deposit during the renewal.
What is the exact process of opening a PPF account?
The step-by-step procedure to open a PPF account online is mentioned below: First, you must login to your net banking portal . Next, click on the option that allows you to open a new PPF account. Certain banks will have an option to choose between a self-account and a minor account.
What is a PPF and How it Works? Public Provident Fund is a type of savings scheme which inculcates the habit of investment and provide savings in small amounts for depositors. The minimum deposit can start from as low as Rs. 500 to a maximum of Rs. 1,50,000 in a financial year.
Who is eligible to open a PPF account?
Criteria of eligibility PPF account can be opened by any person. Whether he is salaried, senior citizen or pensioner, business man or self-employed human-being, he is eligible to open a PPF account. The account of a minor can be opened. Either one of his parents can open and operate his account on his behalf.
Who can open a PPF account in a bank?
The eligibility criteria to open a PPF account are mentioned below: Only Indian residents are allowed to open a PPF account. In case a Non-Resident Indian (NRI) has opened an account while he/she was an Indian resident, the account can be continued for 15 years. Hindu Undivided Families (HUFs) are not allowed to open a PPF account. An individual can have only one account under his/her name.
