PPF Invest Rule: You have just got a job but are not able to save money for your hobbies. Are you planning to save some of your salary from the beginning of the new year? Then you should know about a very simple investment option. Today, we will learn how to save money through PPF — the Public Provident Fund. This investment has no risk like mutual funds or stocks. Instead, it offers guaranteed returns. That is why many people trust this scheme.

What is PPF?

PPF, or Public Provident Fund, is a tax-free savings scheme offered by the central government. The interest earned is calculated on a compound interest basis. You can open a PPF account with just ₹500. If someone deposits ₹500 in a year, the account will remain active. The maximum investment allowed is ₹1.5 lakh in a financial year.

For How Many Years is This Savings?

PPF is a government savings scheme that not only helps you save money but also gives good interest. You can keep your money in this scheme for 15 years. After the completion of 15 years, you can extend it for another 5 years if you want.

How to Invest?

You can deposit money in this scheme in one go or in monthly installments. PPF is also a tax-saving scheme. If you deposit up to ₹1.5 lakh in a year, you can get tax benefits under Section 80C.

How to Withdraw Money?

You can take a loan from your PPF account after 3 years from the date it starts. After 7 years, you can withdraw a part of the money. This Takes 15 year of times period. Once the time period is complete, you can withdraw the entire amount.

Who Can Open a PPF Account?

Any Indian citizen can open a PPF account. Even minors under 18 years can have a PPF account, but it must be opened by their guardian.

How Much Interest is Available?

The government decides the PPF interest rate every three months. In the financial year 2024-25, the current annual interest rate is 7.1%. The interest is calculated on a compound basis.

How to Open a PPF Account?

If you have an account in a government or private bank like SBI, HDFC, ICICI, or BOB, you can open a PPF account easily from home.

Steps to Open a PPF Account Online

  1. Log in to your net banking account.
  2. Go to the “PPF Account” option under the ‘Investment’ or ‘Services’ section.
  3. Fill in the required details.
  4. Upload copies of your Aadhaar card and PAN card.
  5. Deposit a minimum of ₹500.
  6. After completing these steps, download the confirmation slip—your account will be opened.

How is the Interest Calculated?

If someone invests ₹2,000 each month into a PPF account, he will have ₹24,000 invested in a year. In 15 years his total investment will be ₹3.6 lakh. At a rate of 7.1%, he will earn approximately ₹2.9 lakh in interest. So, at the end of 15 years, the total amount that will be paid out will be ₹6.5 lakh.