Public Provident Fund (PPF)

PPF - Public Provident Fund is a secure investment scheme with tax-free interest, long-term savings benefits, and government backing.
OPEN FD
Public Provident Fund (PPF)
OPEN FD
4 mins
22-August-2025

The Public Provident Fund (PPF) is one of India’s most popular government-backed saving schemes. It’s safe, tax-friendly, and comes with guaranteed returns. But here’s the catch—your money is locked away for 15 years, with very limited withdrawal flexibility.

For long-term planners, PPF is a great fit. But if you want stability and liquidity, options like Fixed Deposits (FDs) may offer more control over your money without compromising on safety.

What is Public Provident Fund (PPF)?

The PPF, introduced by the Ministry of Finance, was designed to encourage small savings and build long-term wealth. Investors can open a PPF account with as little as Rs. 500 and grow their money with attractive interest rates and tax benefits.

Looking for shorter lock-ins and flexible tenures? Bajaj Finance FDs offer guaranteed returns with maturity options starting from just 12 months, unlike PPF’s 15-year lock-in.

How important is PPF?

PPF is a go-to choice for risk-averse investors. Backed by the Government of India, it provides stability and predictable growth. However, its rigid rules—like depositing before the 5th of every month to earn interest—can feel restrictive.

With Bajaj Finance FDs, you enjoy assured returns at rates up to 7.30% p.a. while retaining flexibility to withdraw or renew as per your needs. Open FD account.

Fixed Deposit

  1. Trusted by over 5 lakh customers
  2. Fixed Deposits worth more than Rs. 50,000 crore booked
  3. Rated CRISIL AAA/STABLE and [ICRA]AAA(STABLE)
  4. Up to 0.35% p.a. extra interest offered for senior citizens
  5. Flexible interest payout options available - Monthly, Quarterly, Half-yearly, Annually or at Maturity

By proceeding, you agree to our Terms and Conditions

Features of a PPF Account

Feature

Details

Eligibility

Open to salaried, self-employed, and minors (through guardians)

Minimum Deposit

Rs. 500 per year

Maximum Deposit

Rs. 1.5 lakh per year

Interest Rate

7.1% (Q4 FY 2024–25)

Tenure

15 years (extendable in 5-year blocks)

Withdrawals

Allowed from 7th year, partial only

Loan Facility

From 3rd to 6th year

Tax Benefits

Up to Rs. 1.5 lakh under Section 80C

Nomination

Available

Transferability

Yes, between banks and post offices

Benefits of investing in Public Provident Fund (PPF)

  1. Long-term discipline – A 15-year lock-in encourages patience and consistent savings.

  2. Government-backed safety – Zero risk of losing capital.

  3. EEE Tax benefits – Contributions, interest earned, and maturity are all tax-free.

  4. Flexible deposits – Invest from Rs. 500 up to Rs. 1.5 lakh annually.

  5. Compound interest – Interest compounds annually, boosting wealth.

  6. Loan option – Borrow up to 25% of the balance during years 3–6.

  7. Partial liquidity – Withdrawals allowed after year 7.

PPF guarantees safety, but if you prefer steady compounding with shorter lock-ins, an FD is often more practical. Check out interest rates offered by Bajaj Finance of FDs, and invest now!

Eligibility criteria for opening a PPF account

  • Residents only – Indian residents can open a PPF account.

  • Age – Adults 18+ can apply; guardians may open for minors.

  • One account per individual – No joint PPF accounts allowed.

  • Not for NRIs/HUFs – They cannot open new accounts.

Process of opening a PPF account

  1. Select an authorized bank or post office.

  2. Fill out the application form.

  3. Submit KYC documents (ID, address, PAN, photos).

  4. Make an initial deposit (Rs. 500 min).

  5. (Optional) Set up standing instructions.

  6. Add a nominee.

Simple—but remember, this locks in your money for 15 years.

Fixed deposit variants

Highest Credit Ratings | Trusted with over 1.4 million Deposits | Assured Returns on FD
Recommended

Fixed Deposit - 60 Months

INTEREST RATES UP TO
7.30% p.a.
Invest Online

Fixed Deposit - Senior Citizen

INTEREST RATES UP TO
7.30% p.a.
Invest Online

Fixed Deposit - Age below 60

INTEREST RATES UP TO
6.95% p.a.
Open FD

Fixed Deposit - Minor

INTEREST RATES UP TO
6.95% p.a.
Open FD

Fixed Deposit - HUF

INTEREST RATES UP TO
6.95% p.a.
Open FD

Fixed Deposit - Sole Proprietor

INTEREST RATES UP TO
6.95% p.a.
Open FD

Tenure and extension

  • 15-year lock-in: No full withdrawals until maturity.

  • Extension option: Continue for 5-year blocks with or without fresh contributions.

  • Same rates apply: Extended accounts earn the same government-declared rates.

Tax implications of PPF

PPF enjoys the EEE (Exempt-Exempt-Exempt) status:

  • Contributions deductible under Section 80C.

  • Interest earned is tax-free.

  • Withdrawals are exempt from tax.

Unlike PPF, FDs don’t have tax exemptions—but they offer higher interest rates and unmatched flexibility, which can result in better overall returns for many investors. For example, Bajaj Finance FDs offers up to 7.30% p.a. returns. Open FD.

PPF withdrawals

  • Only one withdrawal allowed per year after year 7.

  • Limit: Up to 50% of balance (based on specific year conditions).

  • Full withdrawal only after 15 years.

How to transfer a PPF account

Switching banks or post offices? The process involves a transfer application, documentation (passbook, signature specimen, balance transfer cheque), and KYC verification at the new branch. It usually takes about one month.

How to activate an inactive PPF account

  1. Write to your bank/post office requesting reactivation.

  2. Pay minimum deposits for each inactive year (Rs. 500/year).

  3. Pay Rs. 50 penalty per inactive year.

Public Provident Fund (PPF) limitations

  • Long lock-in: 15 years is a serious commitment.

  • Low cap: Max Rs. 1.5 lakh deposit annually.

  • Restricted liquidity: Limited withdrawals allowed only after 7 years.

  • Returns are fixed: While safe, they can be lower than inflation or market-linked options.

Also Read: VPF Vs PPF

Difference between Bajaj Finance Fixed Deposit and PPF

Particulars

Bajaj Finance FD

PPF

Interest rate

Up to 7.30% p.a.

7.1% p.a.

Minimum investment

Rs. 15,000

Rs. 500

Maximum investment

Rs. 3 crore

Rs. 1.5 lakh/year

Tenure

12–60 months

15 years

Risk profile

Guaranteed returns

Guaranteed returns

Liquidity

Flexible (premature withdrawal allowed)

Limited

While PPF is a great long-term tool, Bajaj Finance FDs help you stay liquid, earn higher returns, and invest larger amounts without restrictions. Check eligibility.

Also Read: Employee Provident Fund (EPF)

Conclusion

The Public Provident Fund (PPF) remains a trustworthy, government-backed savings scheme that ensures steady growth and tax benefits. However, it comes with strict withdrawal limits and a long 15-year lock-in.

For those who value flexibility, higher interest rates, and flexible tenure options, Bajaj Finance FDs can complement—or even outperform—PPF in meeting your financial goals.

In short: PPF is for patience, FDs are for freedom. Open FD account!

Frequently Asked Questions

How many PPF accounts can one have?

An individual can have only one PPF account in their name. Opening multiple accounts is not allowed.

How to convert a minor’s PPF account into a major?

When a minor turn 18, the PPF account can be converted into a major account. The account holder needs to visit the bank or post office to complete the conversion process.

What is the minimum lock-in period for a PPF investment?

The minimum lock-in period for a PPF investment is 15 years. However, partial withdrawals are permitted from the 7th year onwards.

How much can I withdraw from my PPF account?

The amount that can be withdrawn from a PPF account depends on factors such as the account's age. From the 7th year onwards, partial withdrawals are allowed within specified limits.

Can I close my account before 15 years?

While the minimum lock-in period is 15 years, premature closure is allowed in exceptional cases, such as in the event of the account holder's demise. However, specific conditions apply.

Who Cannot Invest in PPF?

Non-resident Indians (NRIs) cannot open new PPF accounts. However, existing NRIs with active PPF accounts can continue their contributions but not extend the tenure after maturity.

Which month is best to open a PPF account?

There's no specific "best" month. However, starting your PPF account in the beginning of the financial year (April) ensures you maximize interest earned as it's calculated on the lowest balance throughout the month. The difference might be minimal, but consistency matters for long-term investments.

Can both husband and wife invest in PPF?

Absolutely! Both husband and wife can open separate PPF accounts and enjoy the benefits individually. This allows them to potentially double their contributions and maximize their long-term savings for retirement or other financial goals.

Who is eligible for PPF?

Any resident Indian individual can open a PPF account. Additionally, guardians can open an account on behalf of a minor child or a person of unsound mind. However, Non-Resident Indians (NRIs) and Hindu Undivided Families (HUFs) are not eligible to open PPF accounts.

How to start PPF?

Online:

  • Most banks offer the convenience of opening a PPF account online.

Offline:

  • Visit a Post Office: Obtain an application form from your nearest post office or sub-post office.

  • Fill the Form: Complete the form with the necessary KYC documents and a passport-sized photograph.

  • Initial Deposit: Make an initial deposit of at least ₹500. The maximum initial deposit is ₹70,000.

  • Annual Deposit Limit: The maximum annual deposit limit is ₹1.5 lakh.

  • Receive Passbook: Once the application and initial deposit are processed, you will receive a passbook containing your PPF account details.

Who is eligible to open a PPF account?

Only resident Indian individuals can open a PPF account. A guardian can also open one on behalf of a minor or a person of unsound mind. NRIs and HUFs are not eligible to open a PPF account.

Can I open more than one PPF account?

Any additional accounts will be considered invalid and may be closed by the authorities.

Is PPF a safe investment option?

Yes, the Public Provident Fund is a government-backed scheme that offers stable returns and tax benefits. While the returns are moderate, they are risk-free, making PPF ideal for conservative investors.

Can I contribute monthly to PPF?

Yes, you can deposit money into your PPF account monthly or in any number of installments throughout the year. However, your total annual contribution cannot exceed Rs. 1.5 lakh.

What is the PPF limit as per Budget 2025?

As per Budget 2025, the maximum annual deposit limit in a PPF account remains Rs. 1.5 lakh. The minimum required to keep the account active is Rs. 500 per financial year.

Is PPF still a good investment in 2025?

Even though the current interest rate is 7.1% (lower than the historic high of 12%), PPF still offers better returns than most fixed deposits and provides tax-free income, making it a reliable option for long-term savings.

Can I open both a PPF account and an FD?

Yes, many investors use PPF for long-term tax-saving and FDs for medium-term goals. Combining both ensures safety and steady returns. Check latest FD rates offered by Bajaj Finance and start investing now!

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Disclaimer

As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer https://www.bajajfinserv.in/fixed-deposit-archives
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.