PPF (Public Provident Fund) is a government-backed long-term savings scheme with a 15-year lock-in period. It offers triple tax exemption (EEE): investment is deductible under 80C, interest earned is tax-free, and the maturity amount is tax-free. The current rate is 7.1% p.a., revised quarterly by the government.
Worked Example:
Deposit: ₹1,50,000/year | Rate: 7.1% | Period: 15 years
Total invested: ₹22,50,000
Maturity: ₹40,68,209 (fully tax-free!)
Can I withdraw from PPF before 15 years?▾
Partial withdrawal is allowed from the 7th year onwards (up to 50% of balance at end of 4th year or end of previous year, whichever is lower). Premature full closure is only allowed after 5 years in specific cases like medical emergency or higher education.
Can I extend PPF after 15 years?▾
Yes, PPF can be extended in blocks of 5 years after maturity. You can extend with or without contributions. Extension with contributions allows continued tax benefits. There is no limit on the number of extensions.
What is the maximum PPF investment per year?▾
The maximum deposit in PPF is ₹1,50,000 per financial year. The minimum is ₹500. If you invest ₹1,50,000 per year, you also get the full 80C deduction benefit.