How to Invest in a Public Provident Fund?

If you're looking for a safe, long-term investment with tax benefits, the Public Provident Fund (PPF) is one of the best options in India. It's backed by the government, gives guaranteed interest, and is perfect for people who don't want to take risks with their money. Here we will discuss how to invest in a public provident fund.

What is a PPF?

PPF stands for Public Provident Fund. It’s a long-term savings plan started by the Government of India to help people save money safely and earn interest, without any risk.

Let's say PPF is a super-safe piggy bank, but one that grows your money every year and gives you full tax benefits. It’s like a government-backed locker where your money rests, grows, and stays untouched for 15 years, then comes out bigger and completely tax-free.

Who Can Open a PPF Account?

PPF is open to all Indian citizens. You don’t need to be earning or employed.

Eligibility:

• Any Indian citizen aged 18 or above
• You can also open a minor account for your child
• NRIs are not allowed to open new PPF accounts

For example, a housewife with no income or a college student can still open a PPF account and start investing with just ₹500.

Note: You can only open one PPF account per person. Even if you open one for your child, the total deposit (your account + minor's account) cannot exceed ₹1.5 lakh in a financial year.

Where Can You Open a PPF Account?

PPF accounts can be opened in:

1. Banks: Most major banks like SBI, HDFC, ICICI, Axis, etc.
2. Post Offices: Available at any local post office

There is no major difference between banks and post offices. Choose whichever is more convenient for you.

Steps to Invest in a Public Provident Fund

To start investing in a Public Provident Fund, you need to open a PPF account. This can be done online or offline, through most major banks or any post office. Here’s a simple step-by-step guide:

You can open the account in your name or on behalf of a minor (like your child). The account has a 15-year lock-in period, but it can be extended in blocks of 5 years after maturity. Where to open:

• Online via net banking (SBI, HDFC, ICICI, etc.)
• Offline by visiting your bank branch or local post office.

If Opening Online

1. Log in to your internet banking account.
2. Go to "Open PPF Account" under the services menu.
3. Fill in the required details (like PAN, Aadhaar, nominee, etc.).
4. Submit the form and make your first deposit (min ₹500).
5. Once the account is opened, add it as a beneficiary.
6. Now you can transfer money to your PPF account directly anytime.

If Opening Offline

1. Visit your bank or post office branch.
2. Ask for the PPF account opening form.
3. Submit your photo, PAN, Aadhaar, and address proof.
4. Deposit at least ₹500 (you can pay by cash, cheque, or demand draft).
5. Fill out the PPF deposit challan (Form B). This has one main section and two counterfoils.
6. The teller will stamp the counterfoil and give it back to you as proof.

How to Deposit in Your PPF Account?

You can deposit money using:

• Online Transfer through internet banking or a mobile app.
• Cash (if you visit the branch).
• Cheque or Demand Draft.

If you’re doing it offline, you’ll need to fill out a PPF deposit slip (Form B) and submit it at the counter.

Tip: Deposit before the 5th of the month to get full interest for that month.

How is PPF Interest Calculated?

The government sets the interest rate every 3 months. It’s currently 7.1% (as of 2025).

• Interest is calculated monthly, but credited annually (on 31st March).
• It’s based on the lowest balance between the 5th and the end of the month.

So always invest before the 5th to earn interest for the full month.

Tax Benefits of PPF

PPF gives you the rare EEE status, which means:

1. Investment up to ₹1.5 lakh/year is tax-deductible under Section 80C
2. Interest earned is tax-free
3. The maturity amount is also tax-free

This makes PPF one of the most tax-efficient options for Indian investors.

Also read: What are the Benefits of PPF Account?

Conclusion

In conclusion, PPF is simple, safe, and smart. You don’t need to be an expert to invest. Whether you're saving for retirement, your child’s education, or just want a place to keep your money safe, PPF gives you stable growth and tax-free returns. It may not give you instant results like stocks, but if you’re patient, it can turn your ₹500 investments into something big.

About the Author

Saniya

I'm a finance content writer with a BBA in FinTech, passionate about simplifying money matters for everyday Indians. I break down complex topics like investments, savings, and digital finance into easy, relatable content. My goal is to help you in a way that’s easy to understand, jargon-free, and actually useful in real life.

View All Articles by Saniya

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