Public Provident Fund

PPF or Public Provident Fund is a savings investment option offered by the Indian Central Government.
You have to stay invested for 15 years. During this period, you cannot close the account and withdraw money unless 5 years of creating the account have passed and you need money for critical illness or fund higher education. In case of death, the account will be closed.

Ideal for

Investors who hate taking risks and have long term goals which are 15 years away.

Not Ideal for

Investors with long term goals and are ready to take more risks for better returns.

What are the alternatives?


Debt Mutual Funds – Gilt

Safety of your investments and returns

Your investment is completely protected by Indian Government making it fully risk-free with guaranteed returns.

 Government revises the interest rate every 3 months. Currently it is 7.1% compounded annually. However, the returns may not be as high to beat the rising cost of day to day items.

How easy is it to convert into cash?

Even if your investments are locked for 15 years, you can take loans from banks against PPF. However, it can be done only between 3rd – 6th year of opening the account. The interest rate is 1% per annum.

Tax Implications

The investment deposit in this scheme is eligible for tax deduction under Section 80C for a maximum of Rs 1.5 Lakhs per year. The interest earned and maturity amount are tax-free.

Opening an Account:

You can open an account in Post Office or Banks such as ICICI Bank, SBI etc.

Past Interest Rates: 

Year Interest Rates %
2003-2004 8
2004-2005 8
2005-2006 8
2007-2008 8
2008-2009 8
2009-2010 8
2010-2011 8
April 2011 – Nov 2011 8
Dec 2011 – Mar 2012 8.6
2012 – 2013 8.6
2013 – 2014 8.7
2014 – 2015 8.7
2015 – 2016 8.7
2016 – 2017 8.1
2017 – 2018 7.78
2018 – 2019 7.8


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Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing. Past performance is not indicative of future returns.

Please consider your specific investment requirements, risk tolerance, investment goal, time frame, risk and reward balance and the cost associated with the investment before choosing a fund, or designing a portfolio that suits your needs.