Post Office PPF Account – Interest rate and Eligibility

Post Office PPF Interest Rate 2023

The Indian post office or Department of the post is one of India’s oldest and largest entities offering a number of investment alternatives. They provide a decent return clubbed with tax benefits. Most importantly, they are backed by the government and hence carry the sovereign guarantee of the Indian government. One of the most talked-about schemes is the Public Provident Fund i.e PPF. In this article, we will have a look at PPF interest rates and other significant aspects. 

What is a PPF Account ?

Public Provident Fund, often referred to as PPF, is a scheme offered by the Indian central government through the post office to its citizens for investment. It not only gives tax benefits in terms of rebate under Section 80C of the Income Tax Act, 1961 but also offers guaranteed returns. Any Indian resident citizen can initiate a PPF account whether self-employed, salaried employee, professional, businessman, among others.

Watch the video to know more about PPF Account Interest Rate  : 

Eligibility

Any individual being a citizen and resident of India is eligible to open a PPF account in his own name or on behalf of a minor. This indicates that a PPF account can also be opened by parents or guardians for their children. However, there are a few restrictions which are as under:

1. An individual can only have one account under his/her name.
2. Can’t be opted by NRIs
3. A Hindu Undivided Family can’t open a PPF account
4. No joint account

Read More : Best Post Office Saving Scheme Online

Post  Office Interest Rate 2023

The amount in PPF can be invested in a maximum of 12 installments or in a lump sum. Finance Ministry announces the rate of interest for PPF accounts every quarter. This interest is compounded on an annual basis. Interest is calculated on the lower balance between the close of the 5th day and the end day of each month. The present interest rate on PPF is 7.1% for the period of Quarter 1 of FY 2021 which is the same as the previous period. 

How to Open a PPF Account in Post Office ?

Visit your nearest post office or sub-post office and get an application form. This form can be also downloaded from the official website.

Duly fill the necessary details in the form and submit it with the needful KYC documents and passport size photos.

The minimum initial deposit required to open a post office PPF account is Rs. 500. And the maximum deposit allowed during a financial year is up to Rs. 1.5 lakhs.

Once the initial deposit is made with the required documents, the applicants are handed a PPF account passbook which contains all the details such as the account number, account holder, branch name, among others.

Also Read: post office saving scheme 2023

Documents Required to Open a Post Office PPF Account

Following documents are required to open a PPF account online:

PAN Card

Address proof

Form for nominee declaration

KYC documents

Verification of Identity (Aadhar, Voter ID, etc.)

Passport size photographs

How to Withdraw From PPF Account ?

Fill in the relevant detail in FORM C. This form can be availed from the nearest branch or the official website.

Submit this form to the branch where your PPF account is held.

Your request will be processed and the post office will get back to you with the update.

PPF Maturity Options

The original tenure for this instrument is 15 years and on application by the account holder, this can be extended for 1 or more blocks of 5 years. 

There are 3 options available once the maturity period is over:

Complete withdrawal

Extend PPF account with no contribution:

Here, the extension is made after 15 years without any contribution from the investor.  This automatically activates as this is the default option where if no action is taken within 1 year of maturity.

Extend PPF account with contribution:

Here, investors can put money in their PPF after extension. Form H needs to be filled and submitted within one year from the date of maturity and a single withdrawal is permitted every year. 

Also Read : post office scheme for boy child

Premature Closure of PPF Account

Investors can close a PPF account after 5 yrs from the end of the year in which the account was opened. In case of premature closure of the PPF account, investors face a 1% reduction in interest from the date of account opening. They can close an account only under the following circumstances:

1. A life-threatening ailment of a spouse, self, or dependent children.
2. To meet the costs of higher education of self or dependent children.
3. Change in residency.

KEY Points Of PPF ACCOUNT

It originated under the PPF scheme in the year 1968.

Being a central government-back instrument, it is very secured and safe when compared to other investment alternatives.

Availability of flexible investment options of lump sum and installments.

It is considered to be one of the best debt options available for the common crowd.

The balance in this account can’t be attached under a court decree.

It offers EEE tax benefits to investors.

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