What is PPF? (Public Provident Fund)
PPF is a long-term government-backed savings scheme in India with a 15-year lock-in period. It offers tax-free returns, making it one of the most popular investments for retirement and long-term wealth building. The current interest rate is 7.1% per annum, compounded annually.
It follows an EEE (Exempt-Exempt-Exempt) tax status — contributions are deductible under Section 80C, interest earned is tax-free, and the maturity corpus is also tax-free.
PPF Maturity Formula
F = P × { [ (1 + r)^n − 1 ] / r } × (1 + r)
Where:
F = Maturity Value
P = Annual Investment
r = Annual Interest Rate (÷ 100)
n = Number of Years (minimum 15)
Key Rules of PPF
- Minimum Investment: ₹500 per year; Maximum ₹1,50,000 per year.
- Lock-in Period: 15 years, extendable in blocks of 5 years.
- Partial Withdrawal: Allowed from the 7th year onwards.
- Loan Facility: Available between the 3rd and 6th year of the account.
Why Choose PPF?
- Sovereign guarantee — backed by the Government of India.
- Triple tax benefit under EEE status.
- Ideal for risk-averse investors seeking steady, long-term growth.
