Public Provident Fund: In a time where financial stability is more important than ever, choosing a secure, risk-free, and tax-saving investment option is essential. One of the most trusted schemes in India is the Public Provident Fund (PPF)—a government-backed investment that guarantees steady growth over time, with the added benefit of completely tax-free returns. With just a monthly deposit of ₹750, investors can build a corpus of ₹2.44 lakh over 15 years. It’s an ideal plan for salaried professionals, first-time investors, retirees, and conservative savers who want safe long-term returns
What is the Public Provident Fund (PPF)?
Launched in 1968 by the Government of India, the PPF scheme is a long-term small savings plan that offers guaranteed returns, zero market risk, and impressive tax benefits. Managed by the Ministry of Finance, it is especially popular among individuals looking to save for retirement, children’s education, or future financial goals.
Key Features of the Public Provident Fund Scheme
- 100% Government-Backed – Ensures capital safety
- Annual Compound Interest – Added at year-end
- 15-Year Lock-In Period – Extendable in 5-year blocks
- Partial Withdrawals Allowed – From 7th financial year
- Tax-Free Earnings – Under Section 80C and EEE status
- Loan Facility – Between 3rd and 6th years
₹750 Monthly PPF Investment – How It Grows Over Time
Thanks to compound interest, even a small investment in PPF can lead to a significant corpus.
Public Provident Fund Growth Chart (₹750/month for 15 Years @7.1% interest)
| Year | Annual Deposit | Interest Earned | Total Value |
|---|---|---|---|
| 1 | ₹9,000 | ₹337 | ₹9,337 |
| 2 | ₹9,000 | ₹1,041 | ₹19,378 |
| 3 | ₹9,000 | ₹1,783 | ₹30,161 |
| 4 | ₹9,000 | ₹2,565 | ₹41,726 |
| 5 | ₹9,000 | ₹3,389 | ₹54,115 |
| 6 | ₹9,000 | ₹4,257 | ₹67,372 |
| 7 | ₹9,000 | ₹5,172 | ₹81,544 |
| 8 | ₹9,000 | ₹6,134 | ₹96,678 |
| … | … | … | … |
| 15 | ₹9,000 | ₹9,734 | ₹2,44,558 |
Total Investment: ₹1,35,000
Total Interest Earned: ₹1,09,558
Maturity Amount: ₹2,44,558
Interest rate is subject to change as per quarterly revisions by the government.
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Benefits of Investing in Public Provident Fund
Here’s why the PPF scheme remains a top choice for Indian investors:
Top Advantages:
- Zero-Risk Investment
- Attractive Interest Rates – Currently at 7.1%
- EEE Tax Status – Investment, interest, and maturity are all tax-free
- Flexible Contributions – ₹500 to ₹1.5 lakh per annum
- Loan Option Available – Between 3rd and 6th years
- Withdrawal Flexibility – Partial access from the 7th year
- Account Extension – In 5-year blocks, even post-maturity
Who Should Consider Public Provident Fund ?
PPF is ideal for:
- Salaried employees seeking tax-saving investments
- Parents planning for child’s education or marriage
- Retired individuals needing a stable savings plan
- First-time investors looking for low-risk options
- Risk-averse savers who prefer fixed returns
Public Provident Fund vs Other Long-Term Investment Options
| Investment Option | Interest Rate | Lock-in Period | Tax Benefit | Risk Level |
|---|---|---|---|---|
| PPF | 7.1% | 15 Years | EEE | No Risk |
| Fixed Deposit (FD) | 6% – 7.5% | 5 Years | Interest Taxable | Low Risk |
| NPS | 9% – 12% | Till age 60 | Partial EEE | Market-Linked |
| Mutual Funds | 8% – 15% | 3 Years+ | Taxable | High Risk |
| Sukanya Samriddhi | 8.2% | 21 Years | EEE | No Risk (for girl child only) |
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Steps to Open a Public Provident Fund Account:
- Fill the PPF account form
- Submit KYC documents (ID + address proof) and a passport-size photo
- Deposit a minimum of ₹500 (recommended ₹750/month)
- Get a passbook or online access credentials
Online PPF account opening is available on most bank portals for convenient 24×7 access.
Things to Consider Before Investing in Public Provident Fund
Before starting your investment, keep these key points in mind:
- 15-Year Lock-In: Though long-term, it ensures discipline
- Interest Rate Changes: Subject to quarterly revisions
- ₹1.5 Lakh Annual Cap: Additional contributions won’t earn interest
- Only One Account Per Person (except guardian accounts for minors)
Frequently Asked Questions (FAQs)
Q1. Is the PPF interest rate fixed?
No, the PPF interest rate is reviewed and updated quarterly by the government.
Q2. Can I withdraw money from my PPF before 15 years?
Yes, partial withdrawals are allowed from the 7th financial year onwards.
Q3. Is the maturity amount from PPF taxable?
No, the entire maturity amount is tax-free under EEE status.
Q4. Can NRIs invest in PPF?
NRIs cannot open new accounts, but they can maintain accounts opened before becoming an NRI.
