How the Public Provident Fund (PPF) Works
The Public Provident Fund (PPF) is a government-backed, long-term savings scheme in India designed to offer guaranteed compounding returns paired with statutory income tax exemptions under Section 80C.
The Critical 5th-Day Monthly Interest Rule
Under official Department of Economic Affairs guidelines, PPF interest is calculated on the minimum balance between the close of the 5th day and the end of the calendar month. Interest compounds annually on March 31st.
Monthly Interest = Minimum Balance (between 5th and Month-End) Ć (Annual Rate Ć· 12)
Frequently Asked Questions
What is the minimum and maximum deposit in PPF? ā¼
The minimum deposit is ā¹500 per financial year, while the maximum ceiling is ā¹1,50,000 per financial year across all PPF accounts held in your name.
Can I withdraw money before 15 years? ā¼
Partial withdrawals are permitted starting from the 7th financial year (subject to 50% of the account balance limit). Loan facilities are available from the 3rd to the 6th financial year.