Public Provident Fund:


Public Provident Fund (PPF) scheme is a popular long term investment option backed by Government of India which offers safety with attractive interest rate and returns that are fully exempted from Tax .Investors can invest minimum Rs. 500 to maximum Rs. 1,50,000 in one financial year and can get the facilities such as loan, withdrawal and extension of account.


PPF Product Features-

  1. Attractive interest rate of 8% that is fully exempted from Income Tax under section 80 C
  2. Good long term investments of 15 years
  3. Deposit Amount as low as Rs.500and maximum Rs.1,50,000 in one financial year
  4. Deposits can be done maximum in 12 transactions
  5. Loan can be availed between 3rd to 6th financial year
  6. Partial withdrawal facility can be availed from 7th financial year onwards
  7. Account can be extended in a block period of 5 years after maturity


Who Can Open a PPF Account or Who are eligible for Public Provident Fund Scheme Accounts ? Who CAN NOT open PPF account?

    Individuals who are residents of India can open an account under the scheme.

    Only one PPF account can be maintained by an Individual, except an account that is opened on behalf of a minor.   Thus, PPF account can also be opened by either parent under the name of a minor.  However, each person is eligible for only one account under his/her name.  Mother and Father both cannot open Public Provident Fund (PPF) accounts on behalf of the same minor. Thus, in case a couple has two children, they can maximum open four accounts i.e. two in their own accounts and two in the name of their children under guardianship of either of the parent.

    Non-resident Indians (NRIs) are NOT eligible to open an account.  However a resident who becomes an NRI during the tenure prescribed under Public Provident Fund Scheme, may continue to subscribe to the fund until its maturity on a non-repatriation basis. (Funds can be transferred via CASH or NRO Account. Funds can be transferred via Internet banking).  However, such an account will not be eligible for extension of five years at the time of maturity.

    Since 13th May, 2005, Hindu Undivided Family can NOT open an account under the scheme.   However, accounts opened prior to that date may continue subscription to their account till maturity.   They also can not extend the account any further.

Where can one open a PPF Account? 

The PPF account can be opened at either of the following:

(a) Branches of State Bank of India and its subsidiaries;

(b) Select branches of designated nationalized banks;

(c) Select Post Offices across India;

(d) ICICI Bank and Axis Bank (Private sector banks).


Following documents are usually required for opening a PPF account:-

  1. Account Opening Form (FormA)
  2. Passport size photograph
  3. Copy of PAN card
  4. Residence proof – Passport /Electricity Bill


What are the Rules for Non Resident Indians for Opening / Continuing PPF account opened before they became NRI?


Let us be clear that NRIs are not eligible to open fresh PPF account.   Thus, if you are an NRI and wish to open a new PPF account, then you are NOT eligible to open the same.   However, those NRIs who already had a PPF account, when they were resident in India, but became NRI during the tenure of the PPF account, then you are eligible to continue investing in the account until it matures, but on a non-repatriable basis. This means NRIs are allowed to continue their existing PPF accounts till maturity but such funds on maturity will not be eligible to be repatriated abroad and needs to be used in India only.