Why PPF Is Special
PPF is one of the few investments in India that enjoys EEE (Exempt-Exempt-Exempt) tax status — your investment is tax-deductible, the interest earned is tax-free, and the maturity amount is tax-free. Backed by the Government of India, it offers the highest level of safety with attractive returns.
| Feature | Details |
|---|---|
| Current Interest Rate | ~7.1% per annum (reviewed quarterly) |
| Lock-in Period | 15 years (extendable in 5-year blocks) |
| Minimum Investment | ?500 per year |
| Maximum Investment | ?1,50,000 per year |
| Tax Benefit | Section 80C (contribution) + Tax-free interest + Tax-free maturity |
| Partial Withdrawal | After 6th year (up to 50% of balance at end of 4th year) |
| Loan Against PPF | From 3rd to 6th year (up to 25% of balance) |
PPF Investment Strategy
? Invest early in the financial year — interest is calculated on the minimum balance between 5th and last day of each month. Investing before April 5th gives maximum benefit.
? Lump sum vs monthly: Annual lump sum before April 5th gives slightly better returns. But monthly contributions are fine for cash flow management.
? Open accounts for family members: Each family member can have their own PPF account. Open one for your child too.
? Extend beyond 15 years: After maturity, extend in 5-year blocks with or without contribution. Continue enjoying tax-free interest.
? Don't withdraw early: The power of compounding works best over the full 15+ year term. Avoid partial withdrawals unless absolutely necessary.
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