PPF Account Rules

PPF Deposit, Withdraw, Loan Rules

Deposit Amount:
The minimum deposit is 500/- and maximum is Rs. 1,50,000/- in a financial year.
One deposit with a minimum amount of Rs.500/- is mandatory in each financial year.
Maximum 12 deposit transactions in a financial year and two deposit transactions in a month are allowed within yearly deposit amount limit of Rs.1,50,000.

Interest Rate and Interest Calculation:
Interest rates are announced by the government periodically. Interest calculation is done monthly and interest is calculated on lowest balance in account between 5th and last day of the month so deposits made after 5th of the month would not earn interest for that month. The interest amount is credited in account at the end of the financial year and compounded annually.

PPF Account at Banks or Post Offices:
PPF accounts can be opened at banks or post offices and can be transferred between them. Same rules are applied and same rate of interest is applicable eveeywhere.

One PPF account can be opened per person. Resident Indians, 18 years or older, can open a Public Provident Fund Account. There is no upper age limit for opening this account.
Non-resident Indians (NRIs) cannot open a PPF account. Existing account holders who become NRI after opening the account can continue to maintain the account till maturity period but can not extend beyond maturity.

Transfers and Withdrawals:
PPF accounts are meant for long term savings so withdraws are restricted. Limited withdrawals are alllowed from year 7 of account opening and full withdrawal of money can be made only on account maturity. In few exceptional situations e.g. serious illness account is allowed to be closed before maturity and full money can be withdrawn.

Loan Against PPF Account:
Loan from PPF account balance can be availed from 3rd financial to 6th financial years when partial withdrawals are not allowed. Maximum loan amount would be 25% of the year-end balance preceding 2 years. Loan has to be repaid within 36 months and interest rate charged on loan is more than what PPF interest rate.

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