See how much interest is earned in PPF account

By Shalini Bhardwaj May 26, 2023 2:38 PM IST

Public Provident Fund (PPF) PPF Account or public provident fund scheme is one of the most popular long-term savings-cum-investment products, mainly because of its combination of safety, returns and tax savings scheme .public provident fund It is a popular investment plan among investors, owing to its many investor-friendly features and associated benefits. It is a long term investment plan popular among individuals who want to earn high but are looking for stable returns. The main goal of individuals opening a PPF account is the protection of the principal amount.

Public Provident Fund (PPF)

Public Provident Fund (PPF)

Public Provident Fund (PPF)

A public provident fund scheme is ideal for individuals with a low risk appetite. Since this scheme is mandated by the government, it is backed with guaranteed returns to protect the financial needs of the public in India. Also, the funds invested in the PPF account are not linked to the market.

In times of downturn in the business cycle, PPF accounts can help preserve your capital. Indian citizens residing in the country are eligible to open a PPF account in their own name. Minors are also permitted to have a Public Provident Fund account in their name, provided it is operated by their parents.

Features of PPF Account

The salient features of the Public Provident Fund Scheme can be listed as follows –

Investment tenure

There is a lock-in period of 15 years on investments in a PPF account, before which the funds cannot be withdrawn completely. If required (public provident fund scheme) an investor can opt to extend this tenure up to 5 years after the lock-in period is over.

Principal amount

Minimum Rs. 500 and max. Rs. 1.5 lakh can be invested annually in the public provident fund scheme. This investment plan can be done in lump sum or on installment basis. However, a person is eligible for only 12 installments in a PPF account in a financial year. Investments have to be made every year in the PPF account to ensure that the account remains active.

Loan against investment

Public provident fund scheme provides the benefit of taking a loan against the amount invested. However, the loan will be granted only if it is availed at any time from the beginning of the third year to the end of the sixth year from the date of activation of the account.

Only 25% or less of the total amount available in the account (PPF account) can be claimed for this purpose. You have to repay the loan in 36 months.

Interest On a PPF Account

The interest payable on the Public Provident Fund Scheme is determined by the Central Government of India. Its objective is to provide higher interest than regular accounts (PPF Account) maintained by various commercial banks in the country.

The rate of interest currently payable on such accounts is 7.1%, and is subject to quarterly updates at the discretion of the Government.

How to open a PPF account (How To Open a PPF Account)

Both offline and online processes are available for an individual provided he/she fulfills the requisite parameters mentioned in the eligibility criteria. Activating PPF online can be done by visiting the portal of any selected bank or post office.


A mandatory lock-in of 15 years is imposed on the principal amount invested in such schemes (public provident fund scheme). In case of emergencies relating to specific end uses, partial withdrawals can be made. However, this amount can be withdrawn only after completion of 5 years of activation of the account (PPF Account). Withdrawals can be made up to 50% of the total balance in your credit at the end of the 4th financial year or at the end of the previous year, whichever is less.

Premature Closure

Premature closure of your PPF account is allowed but only under certain conditions. If you close your account prematurely, you will get 1% less interest than the prevailing rate. The first and foremost condition is that your public provident fund scheme account should have completed at least 5 years from the date of account opening.

Investors should note that the funds invested in the PPF account cannot be liquidated before the completion of the maturity period. Individuals looking for long-term risk-free investment options that provide stable returns can easily opt for this government-backed instrument.

LPG Price 26 May 2023: LPG cylinder became cheaper by Rs 172, see how much LPG cylinder will be available now