Question 1

What is PPF?

Accepted Answer

Public Provident Fund (PPF) is a long-term savings scheme backed by the Government of India. It offers safety with attractive interest rates and returns that are fully tax-exempt.

Question 2

What is the current PPF interest rate?

Accepted Answer

The PPF interest rate is decided by the government every quarter. As of late 2024/early 2025, it is typically around 7.1% per annum, compounded annually.

Question 3

What is the lock-in period for PPF?

Accepted Answer

PPF has a mandatory lock-in period of 15 years. However, partial withdrawals are allowed from the 7th financial year onwards under certain conditions.

Question 4

Is PPF tax-free?

Accepted Answer

Yes, PPF falls under the EEE (Exempt-Exempt-Exempt) category. The investment amount (up to ₹1.5 Lakh under 80C), the interest earned, and the maturity amount are all tax-free.

Question 5

Can I extend my PPF account?

Accepted Answer

Yes, after the maturity of 15 years, you can extend your PPF account in blocks of 5 years indefinitely, with or without making fresh contributions.

Question 6

What is the minimum and maximum investment in PPF?

Accepted Answer

The minimum investment is ₹500 per financial year, and the maximum is ₹1.5 Lakhs. You can deposit in a lump sum or in installments (maximum 12 per year).

Question 7

Can I open more than one PPF account?

Accepted Answer

No, an individual can open only one PPF account in their name. Opening multiple accounts is illegal, and the second account will be closed without interest.

Question 8

Can I open a PPF account for a minor?

Accepted Answer

Yes, parents or legal guardians can open a PPF account on behalf of a minor. However, the combined limit for the parent and minor remains ₹1.5 Lakhs per year.

Question 9

Can I withdraw money from PPF before 15 years?

Accepted Answer

Partial withdrawals are allowed from the 7th financial year onwards. You can withdraw up to 50% of the balance at the end of the 4th preceding year or the immediate preceding year, whichever is lower.

Question 10

Can I take a loan against PPF?

Accepted Answer

Yes, you can avail a loan against your PPF balance between the 3rd and 6th financial year. The loan amount is capped at 25% of the balance at the end of the 2nd preceding year.

Question 11

What happens if I miss a yearly deposit?

Accepted Answer

The account becomes 'inactive'. To reactivate it, you need to pay a penalty of ₹50 for each year of default along with the minimum subscription of ₹500 for each year.

Question 12

Can I transfer my PPF account from Post Office to Bank?

Accepted Answer

Yes, PPF accounts are fully transferable from a Post Office to a Bank or vice versa, and also between different branches of the same bank.

Question 13

Is nomination mandatory for PPF?

Accepted Answer

It is not mandatory but highly recommended to add a nominee to ensure smooth claim settlement in case of the account holder's demise.

Question 14

Can NRIs open a PPF account?

Accepted Answer

NRIs cannot open a new PPF account. However, if they opened one before becoming an NRI, they can continue it until maturity (15 years) but cannot extend it further.

Question 15

How is PPF interest calculated?

Accepted Answer

Interest is calculated on the lowest balance between the 5th and the last day of the month. So, it is best to deposit before the 5th of the month to earn interest for that month.

Question 16

When is the interest credited to the PPF account?

Accepted Answer

Although interest is calculated monthly, it is credited to the account only once a year, on 31st March.

Question 17

Can I close my PPF account prematurely?

Accepted Answer

Premature closure is allowed only after 5 years on specific grounds like treatment of life-threatening diseases or higher education of children, with a 1% interest penalty.

Question 18

Is PPF safe from court attachment?

Accepted Answer

Yes, the balance in a PPF account cannot be attached by any court decree to pay off debts or liabilities.

Question 19

Can I deposit cash in PPF?

Accepted Answer

Yes, you can deposit cash, cheque, or transfer funds online to your PPF account.

Question 20

What is the best time to deposit in PPF?

Accepted Answer

To maximize returns, deposit the full ₹1.5 Lakhs between April 1st and April 5th of the financial year. This ensures you earn interest on the full amount for the entire year.

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