The Public Provident Fund (PPF), a government of India operated savings and investment scheme, offers investors a great way to build a long-term corpus by investing small amounts regularly over a period of time. A PPF account provides a good combination of safety, returns and tax-saving benefits.

Know more about PPF here.

If you wish to invest, here are five PPF account rules you should know about-

PPF Account Rules

Who can open an account, where to open an account and how to transfer your account, here are some of the PPF account rules you should know about.

Eligibility: Any Indian citizen can open a PPF account either in his own name or on behalf of a minor. But, you can’t open a joint account or one for a Hindu Undivided Family (HUF). Also, an individual can have only one account in his name.

Where to open: You can open a PPF account at a post-office or a bank like the HDFC Bank, and you can do it online or offline.

Maturity: A PPF account matures in 15 years, and you can extend it in blocks of 5 years each. You must extend the tenure within one year of maturity.

Account transfer: You can transfer your account from one branch to another or from one bank to another and from a post office to a bank and vice versa without any additional charge.

Nomination: While you can’t have a joint account, you can nominate a person of your choice by filling up the ‘Form E’.

PPF Deposit Rules

How much can you invest, how many times can you invest and what is the interest rate. Here are some PPF deposit rules you should know about.

Investment Limit: You can open a PPF account with as little as Rs. 100. However, you must deposit a minimum of Rs. 500 in a financial year, and a maximum of Rs. 1,50,000 per financial year. You can also choose to deposit the money as a lump sum or in instalments, which must not exceed the limit of 12 instalments per financial year.

Taxation: Your investments up to Rs. 1,50,000 are tax deductible under section 80C of the Income Tax Act (ITA). The returns on your account are also tax-free, making it one of the most tax-efficient investments.

The rate of interest: The government of India sets the interest rate every quarter. At the time of writing, the interest rate is 7.6%.

PPF Withdrawal Rules

Can you take a loan or make a partial withdrawal? Can you close your PPF account prematurely? Here are some PPF withdrawal rules you should know.

Loans: You can take a loan on your account between the 3^rd and 6^th FY of opening the account. You must repay the loan within thirty six months. The rate of interest on the loan is 2% more than the interest you are earning on the account.

Partial withdrawals: From the 7^th FY, you can make partial withdrawals, but you cannot take a loan.

Account closure: You can close your account and make a full withdrawal after the 5^th FY for medical treatment of severe or life-threatening conditions for yourself and your family or for the purpose of higher education.

Now that you are familiar with the PPF rules learn more about how you can open an account with HDFC Bank.

If you are looking to open a HDFC Bank PPF account, click here to start.

* The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice from before you take any/refrain from any action.

Your investments will play an extremely important role in helping you achieve your goals.