PPF Lock-in period

Gaurav Seth
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Gaurav Seth

PPF Lock-in period

Public Provident Fund (PPF) is a saving scheme offered and managed by the central government; the primary purpose is to support small savers over the long term. This is one of the most preferred investment options for individuals who are specifically looking for a guaranteed return on their savings without the associated market risk. This is usually ideal for small savers who want to regularly deposit a portion of their savings into their respective PPF accounts and build a long-term corpus.

The interest rates offered by PPF are high when compared to other saving schemes that may be government-sponsored, such as the National Savings Certificate (NSC) and Post Office Fixed Deposit. In general, PPF rates are higher than the sum of fixed deposit rates offered by any bank, especially to encourage Indian households to save in the long run. An annual interest rate of 7.1% (second quarter of 2021) is applied to deposits, and compound interest is calculated annually. Credit facilities are available with PPF balances. Under certain conditions, you can also make partial and advance withdrawals from your PPF account. You can renew your account with or without additional contributions at the end of your term. You also have the option of closing your account.

Adults can open a PPF account on their own or behalf of minors. The investment period is 15 years, and the lock-in period for the same is 15 years. You can deposit to PPF accounts from Rs.500 to Rs.1.5 lakh per fiscal year. The down payment can be made in one lump sum or installments. There is no limit to the number of installments paid each year. Deposits must be made in each fiscal year during your tenure and are exempt from income tax under Section 80C.

PPF Scheme Features

Investment limit: PPF account holders have a minimum annual Rs. 500.00, highest Rs. You can deposit 150,000 in each account. 

• Investment period: The initial period is 15 years. After that, at the request of the PPF account holder, it can be extended for one year or more (multiple of five years).

• Interest rates: The central government sets interest rates only quarterly.

 • Loan and Withdrawal Options: Loans and prepaid withdrawals are allowed on specified dates, depending on the age of the account and the balance of the account.

• Tax incentives: Income Tax Benefits under Section 80C of the Income Tax Act,1961.

• Nominating Facility: Customers will also be provided with a Nominating Facility on behalf of one or more people. The account holder/subscriber can also designate nominee shares.

• Transferability: PPF account can also be transferred to other branches/banks, post offices, and vice versa when requested by the account owner/participant. This facility is free of charge.

Eligibility criteria for opening a PPF account

 You can open a PPF account as follows.

 • Residents (individuals) of India

 • Minors with legal guardianship

 •senior citizen

 • Person with disability with a legal guardian 

How can I withdraw funds from my PPF account by the deadline?

Step 1: Check if you have the right to revoke your consent early.

Step 2: If you are eligible, get Form C from your bank or post office and fill in the relevant details.

Step 3: If your account is a minor, you need to provide an additional statement that the withdrawn money is for the minor and the minor is alive.

Step 4: Submit the form and all receipts to your bank or post office.

Step 5: If all the information and documents provided are satisfactory, the bank or customer will process them and approve the payment.


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