Post Office PPF Account: The Post Office PPF (Public Provident Fund) Account is one of the most trusted government-backed long-term savings schemes in India. It is designed to promote small savings and offers investors the benefit of secure returns with tax savings. With a fixed 15-year lock-in period, this scheme ensures disciplined savings for future financial security.
Key Features of Post Office PPF Account
- Interest Rate
Currently, PPF offers an interest rate of 7.1% per annum, compounded annually. The government reviews this rate every quarter. For June 2025, the interest rate remained unchanged. - Minimum and Maximum Investment
- Minimum: ₹500 per year
- Maximum: ₹1.5 lakh per financial year (combined across self + minor accounts)
- Lock-in Period & Extension
The initial lock-in period is 15 years. After maturity, you can extend it in blocks of 5 years as many times as you like. - How Interest is Calculated
Interest is calculated on the lowest balance between the 5th and last day of the month and credited annually on March 31.
To maximize returns, deposit your monthly contribution before the 5th of each month. - Tax Benefits (EEE Status)
PPF enjoys EEE status (Exempt-Exempt-Exempt):- Investment is deductible under Section 80C of the Income Tax Act.
- Interest earned is completely tax-free.
- Final maturity proceeds are also 100% tax-free.
- Loan Facility
Between the 3rd and 6th year, you can avail a loan against your PPF account, up to 25% of the balance, at an interest rate of PPF interest + 1%. - Partial Withdrawal
From the 7th year onwards, you can make one partial withdrawal per year, up to 50% of the balance (calculated from the 4th year or the year before, whichever is lower). - Account Activation & Reactivation
- The account can be opened with just ₹500.
- If the minimum deposit is not made in a financial year, the account becomes inactive.
- To reactivate, you must deposit the missed amount + ₹50 penalty per missed year.
- Nomination & Transfer Facility
- PPF is an individual account only (no joint accounts).
- Nomination can be added at the time of account opening or later.
- You can transfer the account between banks, post offices, or across branches.
Example – How ₹1 Crore Can Be Achieved in 25 Years
According to investment calculations, if you invest regularly in a PPF account (say, in your child’s name), the maturity value after 25 years can reach around ₹1 crore.
For instance:
- Annual Investment: ₹1,50,000
- Interest Rate: 7.1%
- Tenure: 15 years → Maturity amount ~₹40.68 lakh
If extended for 25 years with consistent investment, the maturity can grow close to ₹1 crore, thanks to the power of compounding.
uick Reference Table
| Feature | Details |
|---|---|
| Interest Rate | 7.1% p.a. (compounded annually) |
| Min. Investment | ₹500 per year |
| Max. Investment | ₹1.5 lakh per year |
| Lock-in Period | 15 years (extendable in 5-year blocks) |
| Tax Benefits | 80C deduction + tax-free interest + tax-free maturity |
| Loan Facility | Available in 3rd–6th year, up to 25% |
| Partial Withdrawal | From 7th year, once per year, up to 50% |
| Account Reactivation | ₹500 deposit + ₹50 penalty per missed year |
| Digital Features | Aadhaar e-KYC, paperless transactions |
| Best Use | Long-term wealth creation + retirement + child’s education fund |
Why Choose PPF?
Safe & Government-backed – No market risk, fully secure.
Attractive Tax Benefits – Triple exemption makes it ideal for tax planning.
Guaranteed Returns – Predictable interest rate.
Wealth Creation – Long-term compounding can create a huge corpus.
Flexible – Extendable tenure, loan option, and partial withdrawal facility.
| Post Office PPF Calculator | View |
Conclusion
The Post Office PPF Account is one of the best long-term investment tools in India. With its tax-free status, stable interest, and government guarantee, it is suitable for salaried individuals, self-employed, and even parents planning their children’s future.
If you’re looking for a safe, disciplined, and rewarding investment option, opening a PPF account in a Post Office or bank should be at the top of your financial planning list.