Public Provident Fund (PPF) is one of the most satisfactory long-term investment options for low-risk bearers. The investments contributed to PPF are guaranteed to generate high returns. Your PPF account can be opened with a minimum of ₹500 and currently, the offered interest rate is 7.1 per cent.

PPF or Public Provident Fund

PPF just like Senior Citizens Savings Scheme (SCSS), Sukanya Samriddhi Yojana, and the National Savings Certificate (NSC) were introduced by the Government to encourage and enable people to accumulate funds by saving a small portion of their salary.

Major Benefits of PPF

Lock in Period of Funds

PPF scheme has a lock-in period of 15 years during which the contributions will be made and investments cannot be withdrawn, at least not without paying any penalty. Only in case of emergencies, you can withdraw payments and at the end of the maturity, investors can also choose to extend it for another 5 years.

Interest Rate

At the end of every quarter, the interest rate on PPF is decided by the Government. “PPF interest rate for the fourth quarter of the FY 2022-23 i.e. from 1st January to 31st March 2023 has been fixed at 7.1%. Each month, the interest amount is calculated on the lowest PPF balance in the account after the 5th of every month to the last day of the month and the amount is credited to the PPF account at the end of every financial year. Hence, PPF investors are advised to make contributions to their PPF account before the 5th of each month,” mentioned Paisabazaar.

Minimum and Maximum Contribution Amount

PPF account holders will have to make a minimum investment of ₹500 annually and a maximum investment of up to ₹1.5 lacks can be made in one financial year.