Understanding PPF Interest & Rules
Public Provident Fund (PPF) is a popular government-guaranteed long-term savings scheme in India. Interest is calculated on the lowest balance between the 5th and last day of each month and credited annually on March 31st.
Pro Tip for PPF Investors
To maximize interest earnings, deposit your monthly PPF installment on or before the 5th of every month. If you deposit after the 5th, you lose out on interest for that entire month.
Frequently Asked Questions (FAQ)
What is the maximum yearly deposit allowed in PPF?
The maximum limit for PPF deposit is ₹1.5 Lakh per financial year. Deposits exceeding ₹1.5L will not earn any interest and do not qualify for tax deductions.
What is the lock-in period for PPF?
PPF accounts have a mandatory lock-in tenure of 15 years. After 15 years, you can extend the account in blocks of 5 years with or without fresh contributions.
Why is PPF called an EEE tax instrument?
PPF qualifies for Exempt-Exempt-Exempt (EEE) status: deposits are tax-deductible under Section 80C, interest earned is non-taxable, and maturity returns are 100% tax-exempt.