PPF Account Benefits: Know Why You Must Open a Post Office Public Provident Fund Account

Department of Posts, under the Ministry of Communications, Government of India has a network of more than 1.5 lakh post offices across the country. It offers numerous savings schemes with different interest rates for the public which are very lucrative. Interest rates on post office saving schemes move in proportion to the government's interest rates on small savings schemes that are revised on a quarterly basis. One such savings plan offered by the post office is 15-year Public Provident Fund (PPF) Account, as per its official website - indiapost.gov.in.

Here are few important things to know about the post office public provident fund (PPF) account:

1. To open a PPF account, an investor needs a minimum of Rs. 100 but he or she will have to deposit Rs. 500 in a financial year.

2. A post office PPF account can be opened by cash and cheque, whichever way is convenient to the customers.

3. The maturity period of the PPF account is 15 years but it can be extended within 1 year of maturity for another 5 years or so.

4. In case the account is opened through a cheque, the date of realisation of cheque in government's account must be date of opening of the PPF account. You can also open a joint account.

5. According to India Post, the maximum limit in a financial year is Rs. 1, 50,000. Deposits can be made in lump-sum or in 12 installments.

6. The post office public provident fund account provides an interest of 8 % per annum that is compounded yearly, as per India Post.

7. Investment made under public provident fund account is also eligible for income tax benefits under Section 80C of the Income Tax Act, 1961. Interest earned is tax-free.

8. Nomination facility is offered at the time of opening of the account and also after opening of the account. Account can be changed from one post office to another.

9. A PPF account holder cannot close the account before finishing the 15-year period. 

10. Premature withdrawal is allowed every year from 7th financial year from the year of opening of the account.

11. The Post office account also gives loan facility from 3rd financial year.

Interest payable, Rates, Periodicity etc - from 01/01/2019, interest rates are as follows:-

8 percent per annum (compounded yearly).

​For more details log on to the official website of India Post - www.indiapost.gov.in