The public provident fund (PPF) is one of the fixed-income financial instruments.
Investors can invest their money in their PPF account for as many as 15 years in a row.
However, if one does not need the money at the end of 15 years, he or she can extend the tenure of the PPF account for as many years as needed.
Investors can invest as low as Rs 500 per year, and as high as Rs 1.5 lakh per year, in their PPF accounts.
PPF is also one of the very few schemes to save taxes with its Exempt-Exempt-Exempt (EEE) feature, meaning that it is totally a tax-free savings option.
A single adult who is a resident Indian can open a PPF account, while a guardian on behalf of a minor/person of unsound mind can also invest in PPF.
The interest rate on PPF currently stands at 7.1 per cent. It is reviewed on a quarterly basis.
For premature withdrawals, a subscriber can take one withdrawal during a financial after five years excluding the year of account opening.
Only 50 per cent of the balance at the credit at the end of the fourth preceding year or at the end of the preceding year, whichever is lower, can be withdrawn.
After 15 years, a PPF subscriber take maturity payment by submitting account closure form along with a passbook at the concerned Post Office.