When and How Much Should You Invest in Public Provident Fund (PPF)

A PPF account can be opened by an adult for self or on behalf of a minor. The account tenure is 15 years and the lock-in period for the account is 15 years.

The PPF has a minimum tenure of 15 years, which can be extended in blocks of 5 years as per your wish.

PPF allows a minimum investment of Rs 500 and a maximum of Rs 1.5 lakh for each financial year. Investments can be made in a lump sum or in a maximum of 12 instalments.

The account can be opened with just Rs 100 a month. Annual investments above Rs 1.5 lakh will not earn interest and will not be eligible for tax savings.

Deposits into a PPF account have to be made at least once every year for 15 years.

The deposit into a PPF account can be made either by way of cash, cheque, demand draft (DD) or through an online fund transfer.

A PPF account holder can designate a nominee for his account either at the time of opening the account or subsequently.

A PPF account can be held only in the name of one individual. Opening an account in joint names is not allowed.

Since PPF is backed by the Indian government, it offers guaranteed, risk-free returns as well as complete capital protection. The element of risk involved in holding a PPF account is minimal.

The PPF interest and maturity amount are tax-free under section 80C of the Income Tax Act, 1961.

PPF amount can be withdrawn partially from the seventh financial year onwards.