The government-backed Post Office Public Provident Fund (PPF) delivers attractive returns of 7.1% annually together with tax advantages. People widely prefer PPF as a tax-saving instrument because it can generate deductions through Section 80C of the Income Tax Act.
Customers can access partial funds from their PPF account once a year after the account reaches its fifth anniversary (exclusively from the date of opening). Investing between ₹4,000 and ₹11,000 per month into a PPF account during 25 years will result in building the following amount of wealth.
Post Office vs Bank For PPF
PPF accounts exist for opening either at banking institutions or Postal Service branches. The features and rules of PPF are equal in the two avenues with convenience becoming the main determining factor. Any adult Indian and minors with guardianship can become eligible to start a PPF account.
All qualified Indian citizens who are 18 years or older can establish PPF accounts. If a guardian wishes to open a PPF account they can do so on behalf of their underage dependents. A person cannot hold more than one PPF account nationwide since these accounts exist either through a post office or a registered bank.
PPF Deposit Rules
Every PPF account holder must deposit a minimum amount of ₹500 each year but the contribution limit is ₹1.5 lakh which applies to combined deposits made into personal and minor accounts.
PPF Lock-In Period
All PPF accounts have a requirement to stay locked for 15 years after opening. Account owners cannot withdraw funds from PPF accounts prior to their expiry of the time requirement.
Post-Maturity Options
After PPF maturity you have to provide an account closure form combined with your passbook at the post office to retrieve your matured funds. The maturity amount has two separate options available for recipients. They can either keep it stored in the account or withdraw it completely. The prevailing PPF rate will determine accumulation of interest together with the ability to make annual withdrawals from your account. The account extension process includes a submission request for five-year blocks that must happen before the ending year of the period covered by the PPF.
PPF Withdrawal Guidelines
Account holders can withdraw funds only after their accounts have reached their fifth anniversary. The withdrawal limits your ability to take money only once per year to an amount less than half the accumulated balance you held at month four of your previous withdrawal year or four years before your first withdrawal.
PPF Returns Over 25 Years (at 7.1% annual interest)
Monthly Investment: ₹4,000
Annual Investment: ₹48,000
Total Investment Over 25 Years: ₹12,00,000
Estimated Interest Earned: ₹20,98,565
Maturity Amount: ₹32,98,565
Monthly Investment: ₹8,000
Annual Investment: ₹96,000
Total Investment Over 25 Years: ₹24,00,000
Estimated Interest Earned: ₹41,97,130
Maturity Amount: ₹65,97,130
Monthly Investment: ₹11,000
Annual Investment: ₹1,32,000
Total Investment Over 25 Years: ₹33,00,000
Estimated Interest Earned: ₹57,71,053
Maturity Amount: ₹90,71,053
Also Read: Power Of Compounding: Know In How Many Years A Rs 7,000 Monthly SIP Can Grow Into Rs 1 Crore Corpus
