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Public Provident Fund (PPF): 5 Lesser Known Facts


Public Provident Fund (PPF) is a very popular investment tool as it offers tax free interest, as well as tax exemption under Sec 80C of the Income Tax Act.


PPF provides risk-free returns and helps individuals to contribute for their retirement.

There are many banks including private and public sector banks which are offering Public Provident Fund Account. However, not all the branches of the banks are authorized to open the PPF account.

Earlier, only Post office was authorized to open and maintain PPF account.

Public Provident Fund (PPF): 5 Lesser Known Facts

Here are 5 lesser-known facts on Public Provident Fund.

1) Best time to invest in PPF

You must deposit money before the 5th of every month, since interest is calculated on the least balance between 5th and 30th of each month. Deposits after 5th would mean lower interest.

2) You can invest in lump sum or 12 installments

Individuals having lump sum amount can invest amount in PPF. The ideal date would be April 5, as this would ensure that you receive interest rate for the entire year without bothering about depositing before 5th of each month.


The maximum limit is 12 installments in a year to deposit the amount.

3) Online Transfer

Many banks offer online facility to transfer the amount to PPF account. It is important to have internet banking to avail of the facility of transfer from your account to PPF account through net banking. Click to know more on PPF online transfer.

4) Minor PPF Account

An individual can open another account in the name of minors. However, the maximum investment limit will be considered adding both the accounts.

What this means, is the tax limit for an individual is Rs 1.5 lakh for a year. Amount from both accounts should not exceed the tax limit to avail tax benefits.

In case of two kids, a child and one of the parents cannot invest more than Rs 1.5 lakh, while the wife and the other child can invest for another Rs 1.5 lakh, taking the total to Rs 3 lakh for the entire family.

5) PPF does not allow

Individuals cannot open Joint account. The account should be opened in a single name.

NRI's are not allowed to invest in PPF. However, he can maintain the existing account.

Hindu Undivided Family (HUF) are not eligible to open a PPF Account. Earlier HUF were allowed to invest in PPF account and it was withdrawn from May 2005.

Story first published: Tuesday, December 22, 2015, 9:28 [IST]
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