The Public Provident Fund (PPF) is a long-term savings scheme supported by the government. People can open a PPF account at post offices and selected banks.

It helps people save money for their future and also provides tax benefits.

Main Features of a PPF Account

1. 15-Year Duration

A PPF account has a lock-in period of 15 years. After 15 years, the account can be extended in blocks of 5 years.

2. Deposit Limits

• Minimum deposit: ₹500 per financial year.
• Maximum deposit: ₹1,50,000 per financial year.

3. Tax Benefits

PPF provides tax benefits under Section 80C, subject to applicable tax rules. The interest earned and maturity amount are also tax-free under the conditions described in the source.

4. Government-Set Interest

The government decides the PPF interest rate every three months (quarterly). Interest is compounded annually.

5. Loans and Partial Withdrawals

Account holders can:

• Take loans after the specified period.
• Make partial withdrawals after the specified period.

These facilities are available according to PPF rules.

Real-Life Example

Imagine a small shop owner who deposits ₹1,00,000 every year into a Post Office PPF account.

By saving regularly, the shop owner builds a fund for the future. The account also provides tax benefits under the applicable rules.

Remember for Exams

A PPF account is a government-backed savings scheme with a 15-year duration, yearly deposit limits, tax benefits, interest and withdrawal facilities.