Independent guide. Money Schemes is not a government website and does not take applications or payments. Apply only on the official portal, at a post office, a bank branch or a Common Service Centre.
A PPF account is a Public Provident Fund account run by the Union government that any resident Indian can open at a post office or an authorised bank, putting in between 500 rupees and 1.5 lakh rupees each financial year for 15 years and earning 7.1% a year at the current rate. Deposits, yearly interest and the closing payout all escape income tax, and deposits earn an 80C deduction for those who file in the old regime.
This page covers the account itself: who may hold one, the deposit rules, the paperwork at the counter, the loan facility and the common slips people make. For how interest is fixed see the PPF interest rate page, for payouts see PPF withdrawal rules, and to project a balance use the PPF calculator.
At a glance
Run by
Ministry of Finance, through post offices and authorised banksWho can open
Any resident Indian individual, plus one account for each minor in their careYearly deposit
500 rupees to 1.5 lakh rupees, in multiples of 50Interest
7.1% a year for October to December, added once a yearTerm
15 full financial years after the year of opening, extendable in 5 year blocksTax
Deposit under 80C (old regime); interest and maturity exemptOpening form
Form 1 under the PPF Scheme rules
What is a PPF account and how does it work
Think of it as a long savings box with a government lock. You pay in during the year, the post office or bank works out interest every month on your balance, and the whole year's interest is credited each 31 March. Next year you earn interest on that interest too, which is why the balance grows faster in the later years.
The account matures after 15 complete financial years, and the count begins with the financial year after the one in which you open it. So whether you open in May or in February, the clock effectively starts on the next 1 April. At maturity you can take the money, keep the account running without deposits, or extend it with deposits for five more years.
The balance is protected by law: a court order or decree for a debt cannot attach the money standing in a PPF account. Only one person can hold an account; joint PPF accounts are not allowed.
PPF account rules on deposits
- Minimum: 500 rupees in each financial year, or the account is treated as discontinued.
- Maximum: 1.5 lakh rupees in a financial year. This ceiling covers your own account and any account you run for a minor child, taken together.
- Multiples: deposits must be in multiples of 50 rupees.
- How often: pay the year's amount all at once or spread over the year, by cash, cheque or online transfer.
- Excess money: anything above the ceiling earns no interest and is refunded.
If you missed the 500 rupees minimum in some year, the account can be revived before maturity by paying a fee of 50 rupees for each year missed plus 500 rupees for each of those years. A discontinued account still earns interest, but loans and partial withdrawals are blocked until it is revived.
Who can open one, and the PPF age limit
There is no age limit. A resident individual of any age can open an account in their own name, and a parent or guardian can open one for each minor child or for a person of unsound mind in their care. A child cannot have two accounts, even if both parents try to open one.
Nobody may hold more than one such account anywhere in India, whether at a post office or a bank. A Hindu Undivided Family cannot open a new account, and the opening form asks you to declare that you and the minor are resident citizens. If you later become a non-resident, the rules allow premature closure on that ground; ask your accounts office how your existing account will be handled.
How to open a PPF account: counter steps
- Visit any post office that does savings bank work, or a branch of an authorised bank. A public sector bank branch usually handles it.
- Ask for Form 1 (account opening) and fill your name, date of birth, address, Aadhaar number and PAN. For a minor, add the child's details and birth proof.
- Attach a recent passport size photo and self attested copies of Aadhaar and PAN. If you have no PAN, ask for Form 60.
- Fill the nomination part. You can name up to four nominees and split the shares.
- Hand over an opening deposit of 500 rupees or more by cash, cheque or transfer.
- Collect the passbook and check that your name, account number and first deposit are printed correctly.
Some banks let existing customers open the account online through net banking. At the post office, holders of a savings account with internet banking can ask the counter whether online opening is enabled for them.
Taking a loan against your PPF balance
A loan is allowed from the third financial year of the account to the sixth. In the scheme's words, the window runs from one year to five years after your opening financial year ends. Apply in Form 2.
- The ceiling is 25 percent of the balance as it stood on 31 March of the second year before your application year.
- Repay the principal within 36 months, in one go or in parts.
- Interest on the loan is 1 percent a year. If the principal is not cleared in 36 months, interest is charged at 6 percent a year instead.
- Only one loan a year, and a new one only after the old one is fully repaid.
From the seventh year, the loan route closes and partial withdrawal opens instead. That is covered on our withdrawal rules page.
Is PPF tax free
Yes, on all three counts, for the account holder. Deposits up to 1.5 lakh rupees in a year can be claimed as a deduction under Section 80C if you file under the old tax regime; the new regime does not give this deduction. Section 10(11) of the income tax law exempts the yearly interest, and the payout at maturity is tax free as well. You should still show the interest as exempt income in your return.
PPF compared with two other long term post office schemes
| Point | PPF | Sukanya Samriddhi | NSC |
|---|---|---|---|
| Who | Any resident person | Girl child below 10, opened by guardian | Any resident person |
| Rate now | 7.1% | 8.2% | 7.7% |
| Term | 15 years, extendable | 21 years from opening | 5 years |
| Yearly limit | 500 to 1.5 lakh | 250 to 1.5 lakh | Minimum 1,000, no upper limit |
| Interest tax | Exempt | Exempt | Taxable |
Read more on Sukanya Samriddhi and the National Savings Certificate. Which one suits a family depends on the goal and the time frame, so weigh lock in and liquidity, or ask a registered adviser.
Slips that cause trouble at the counter
- Opening a second account at a bank when one already exists at the post office. The second one is irregular and can be closed without the interest you expected.
- Paying 1.5 lakh rupees into your own account and more into your child's account in the same year. The ceiling is shared.
- Paying after the 5th of the month. A rupee that arrives on the 6th does not count for that month's interest.
- Forgetting to submit Form 4 within a year of maturity and then paying in. Those deposits are refunded without interest.
- Leaving the nomination blank, which makes claims slower for the family.
Frequently asked questions
What is the PPF age limit?
There is no lower or upper age limit for a resident individual. A minor's account is opened and run by a parent or guardian until the child turns 18.
How many PPF accounts can one person hold?
Only one in their own name across all post offices and banks. A guardian can also run one account for each minor child, but the 1.5 lakh rupees yearly ceiling covers both together.
Is the PPF scheme in post office different from the bank one?
No. The scheme rules, the rate and the tax treatment are the same everywhere. You can also move an existing account between the two without breaking it.
What is the post office PPF scheme 15 years rule?
The account matures after 15 complete financial years, counted from the 1 April that follows the opening date. After that you can close it, keep it without deposits, or extend it with deposits for blocks of five years.
What documents do I need for PPF account opening?
Form 1, a photo, Aadhaar and PAN (or Form 60), and an address proof if the Aadhaar address is old. For a minor, carry the child's birth certificate and the guardian's KYC papers.
Can NRIs open a PPF account?
A non-resident cannot open a new account. The opening form asks you to declare resident status, and change of residency is one of the grounds for premature closure.
How can I check PPF account details or balance?
Update the passbook at the counter, or use post office internet banking or the India Post ePassbook service if your account is linked. Bank accounts show the PPF balance in net banking.
Official sources
- India Post: Public Provident Fund Scheme notificationwww.indiapost.gov.in
- India Post: savings schemes and current rateswww.indiapost.gov.in
- India Post ePassbookposbseva.indiapost.gov.in
- Income Tax Departmentwww.incometax.gov.in
Rules, amounts and portals can change. Check the official source before you apply or deposit.