Public Provident Fund

• The account can be opened by an individual or a minor through the guardian.
• Those who are contributing to GPF Fund or EDF account can also open a PPF account.
• The grand father/mother cannot open a PPF on behalf of his/her minor grand son/daughter.
• A Power of Attorney holder can neither open nor operate a PPF account.
• No age is prescribed for opening a PPF account.
• Joint account is not permissible.
• Nomination facility is available.
• The rate of interest is 8.6% compounded annually.
• The minimum deposit is 500/- p.a and the maximum is Rs. 1,00,000/- p.a
• The deposit in a minor account is clubbed with the deposit of the account of the guardian for the limit of Rs.70,000/-.
• One deposit with a minimum amount of Rs.500/- is mandatory in each financial year.
• The deposit can be in lumpsum or in convenient installments, not more than 12 installments in a year or two installments in a month, subject to total deposit of Rs.1,00,000/-.
• Tax saving instrument under section 80C and Interest is totally tax free.
• Loan facility available from third year.
• The Public Provident Fund Scheme is a statutory scheme of the Central Government of India.
• The Scheme is for 15 years and premature closure of a PPF Account is not permissible except in case of death..
• It is not necessary to make a deposit in every month of the year.
• The amount of deposit can be varied to suit the convenience of the account holders.
• The account in which deposits are not made for any reason is treated as discontinued, account and such an account cannot be closed before maturity.
• The discontinued account can be activated by payment of the minimum deposit of Rs.500/- with default fee of Rs.50/- for each defaulted year.
• The deposits shall be in multiples of Rs.100/- subject to minimum of Rs.500/-.
• Interest is not contractual but the rate is notified by the Ministry of Finance, Govt. of India, at the end of each year.
• The facility of first withdrawal in the 7th year of the account subject, to a limit of 50% of the amount at credit preceding three year balance.
• Thereafter one withdrawal in every year is permissible.
• Nominee/legal heir of PPF Account holder on death of the account holder cannot continue the account and the account has to be closed in such case
• The account holder has an option to extend the PPF account for any period in a block of 5 years at each time.
• The account holder can retain the account after maturity for any period without making any further deposits.
• The balance in the account will continue to earn interest at normal rate as admissible till the account is closed.
• One withdrawal in each financial year is also admissible in such account.
• A PPF account can be opened either in a Post Office or in a Nationalsed Banks.
• The Account is transferable from one Post Office to another and from Post Office to Bank or from a Bank to a Post office.
• Account is transferable from one Bank to another bank as well as within the bank to any branch.
• Deposits in PPF qualify for rebate under section 80-C of Income Tax Act.
• The interest on deposits is totally tax free.
• Deposits are exempt from wealth tax.
• The balance amount in the PPF account is not subject to attachment under any order or decree of court in respect of any debt or liability.