How To?

How To Invest In A Public Provident Fund Or PPF?

Personal Finance
08-11-2023
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What are your plans for investment this financial year? Are you aware of tax saving schemes? Want to learn more about investments?


While investing, make sure you have a forecast for the long term. At the same time, the investment must be a tax-saving option.


High returns and low risks are the key features of a long-term investment. These include shares, mutual funds, public provident funds, LIC, and so on. If you want a minimal-risk long-term investment, the Public Provident Fund (
PPF) is one of the best options. It guarantees both the principal and the returns it provides.

Want to know more about the PPF scheme? Keep reading further.

Public Provident Fund

Public Provident Fund (PPF) is one of the most popular long-term investments in India. The Finance Ministry’s National Savings Institute introduced the PPF scheme in 1968. Its primary goal is to encourage people to save money. PPF also pays interest on savings.


This investment combines tax benefits, financial returns, and security. It also offers an attractive interest rate.
Income tax is not applied to the interest earned or the returns.

Below is a table that explains the different aspects of the PPF scheme.

Interest rate7.1% Per Annum
Minimum and Maximum amountRs. 500 to 1,50,000 Per Annum
Investment tenure15 years
Tax BenefitUnder Section 80C, up to Rs. 1.5 lakhs Per Annum
Maturitysubject to the tenure of the investment

Features of Public Provident Fund (PPF)

Here are some of the key features of PPF:

1. Tenure

PPF is a long-term investment with a lock-in period of 15 years. Only upon maturity, you can withdraw the accrued funds. You can also choose to extend your tenure for another 5 years when the real lock-in time is over. Only in cases of emergencies are premature withdrawals permitted.

2. Interest rate

The government determines and pays the PPF interest rate every quarter. The PPF interest rate for the third fiscal quarter of 2022–2023, has been set at 7.1%.

3. Amount of Investment

You can invest a minimum of Rs. 500 to a maximum of Rs. 1,50,000 every year.

4. Tax Benefits

Section 80C of the Income Tax Act of 1961 exempts the PPF interest and maturity amount from taxation.

5. Nomination

You can name a nominee for your PPF account when you open the account or even later.

6. Loan against PPF

A PPF account holder can borrow against their balance. However, you can obtain the loan only in the third and sixth years. The maximum loan amount is 25% of the PPF balance.

7. Risk Factor

PPF is a risk-free investment. You get guaranteed returns from it.

8. Mode of deposit

You can deposit the PPF amount by cheque, demand draft, cash, or online transfer.

9. Joint Account

You can have only one PPF account under your name.

How To Invest In A Public Provident Fund Or PPF?

Below are the steps to invest in a PPF scheme:

The right time to invest in PPF

There is no such ideal time, but the best time to invest in a PPF is at the start of the year.

This is because if you invest in PPF in this manner, you can earn interest on your deposits for a full year.

Eligibility Criteria

  1. You can open a PPF account only if you are an Indian citizen.
  2. There is no age limit for opening the PPF account.
  3. For minors, parents or guardians can open the account.
  4. You can open only one PPF account.

Opening a new PPF account offline

You can open a PPF account by visiting any bank or post office branch.

The documents you require are as follows:

  • Fill out the application form for opening the PPF account.
  • You must produce ID proof, such as a passport, Aadhaar card, or Permanent Account Number (PAN) card.
  • You must submit address proof that shows your current residence.
  • Signature proof documents (Pan card., Aadhar card, Passport)
  • 2 Passport-size photos.
  • Fill out Form E for nomination details.
  • Birth Certificate (for minor) along with the above documents for parents or guardians.

After verifying the documents, you can deposit the amount in your PPF account.

Each document requires self-attestation. Additionally, you must have all the original documents for validation. After validation, you will receive your PPF account number with the passbook.

Opening a PPF account online

Step 1: Log into the selected bank’s internet banking or mobile banking portal.

Step 2: You can select the ‘Open a PPF Account’ option from it.

Step 3: If the account is for yourself, click on the ‘Self Account’ option. If opening on behalf of a minor, select the ‘Minor Account’ option.

Step 4: Fill in the application form.

Step 5: Enter the deposit amount you plan per financial year. You can set standing instructions at this stage.

Step 6: Now Apply. Once done, you will receive an OTP on your registered mobile number. Enter the same and verify.

Step 7: Once verified, your PPF account is good to go.

You can see the PPF account number on the screen. You will also get an email to your registered email address with all the details.

Linking your Aadhaar with your PPF account online.

Step 1: Log in to your internet banking account.

Step 2: Select “Registration of Aadhaar Number in Internet Banking”

Step 3: Type your 12-digit Aadhaar number and then click ‘Confirm’.

Step 4: Choose the PPF account and link it with your Aadhaar.

Step 5: Click on “Inquiry” to check the status.

Withdrawal of the PPF amount

You can only entirely withdraw your PPF account upon maturity, or after 15 years have passed. The whole amount and any interest accrued may be withdrawn at any time after 15 years. You can close the account upon withdrawal. However, you can choose partial withdrawals after the completion of 6 years. Premature withdrawals are permitted up to 50% of the balance in your PPF account at the end of the fourth year.

The Bottom Line

The PPF scheme can be a fantastic alternative if you don’t like taking on high-risk investments, yet want the assurance that comes with government-backed investments.

To learn more about financial instruments or investments, you can always visit the Piramal Finance website.

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