PPF Account Update: The Public Provident Fund (PPF) is generally considered a safe savings scheme, but with proper planning, it can also be used as a retirement or pension fund. Its biggest advantage is that the investment is completely secure and there is no market risk. After opening a PPF account, the money is locked in for 15 years. However, the real decision needs to be made at the time of maturity, as this determines your retirement fund, tax savings, and access to your money.
Options available after PPF maturity
After 15 years, the account holder has three options. The first option is to close the account. If you do not wish to continue with PPF, you can withdraw the entire amount and close the account. For this, you need to submit a closure form and your passbook.
The second option is to continue the account without making any new contributions. In this case, you do not have to make any new investments, but you continue to receive interest on the existing balance at the rate determined by the government. This interest is completely tax-free, and you also get the facility of partial withdrawal once a year.
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The third option is to extend the account for 5-year blocks with continued contributions. You can continue making investments. For this, it is necessary to submit Form-4 or Form-H within one year of maturity. If this form is not submitted on time, the account will automatically be extended without contributions.
PPF Tax System
PPF is among the select schemes where the EEE tax system applies. This means that the investment, interest, and withdrawals are all tax-free. Investments up to Rs. 1.5 lakh per year is eligible for tax exemption under Section 80C. The interest earned on the deposited amount is completely tax-free, and there is no tax on withdrawals at maturity or later.
PPF offers excellent interest rates
In the financial year 2025-26, PPF is offering an annual interest rate of 7.1 percent. Interest is calculated on an annual compounding basis. Interest is added to the lowest balance in the account between the 5th of each month and the last day of the month.
PPF Loan and Partial Withdrawal Rules
The loan facility on a PPF account is available from the third year to the fifth year. The maximum loan amount can be up to 25% of the balance at the end of the second year. If the loan is repaid within 36 months, an interest rate of 1% is charged. After the stipulated time, the interest rate increases to 6%. The partial withdrawal facility is available after 5 years, and a maximum of 50% of the amount can be withdrawn.
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How to Open a PPF Account Online
To open a PPF account online, first log in to your bank’s internet or mobile banking website. Select the option to open a PPF account. If you are opening the account for yourself, select “Self Account,” and if you are opening it for a child, select “Minor Account.” Then fill in the necessary personal information and nominee details.
Enter the amount you wish to deposit during the entire financial year. After submitting the form, you will receive an OTP on your mobile phone, which you will need to enter to complete the verification. Once the process is complete, your PPF account will be opened, and the account number will be displayed on the screen. This information will also be sent to your email address.
