Public Provident Fund Calculator: Planning to open a PPF account? Top 10 FAQs Answered- Check interest rate, tax benefits, loan, maturity & more

Public Provident Fund or PPF is a popular investment option that offers assured returns with government guarantee. Considered one of the safest investment products, PPF can be a good option for retirement planning and to meet long-term financial goals such as marriage, your child’s education and more. So how much money will you get after 15 years of investing in PPF? What are the tax benefits of Public Provident Fund scheme? Who determines the interest rate of PPF and what is the compounding principle? Can you take a loan against your PPF account: We answer the top 10 frequently asked questions on PPF that you should check before investing in Public Provident Fund: (AI image)

PPF Interest Rate: The interest rate for the PPF is set by the Ministry of Finance on a quarterly basis, so it can change every three months. At present the PPF interest rate stands at 7.1% Interest is calculated based on the lowest balance in your PPF account between the close of the 5th day and the end of the month. The interest earned is credited to your account at the end of each financial year. (Image source: Freepik)

To open a Public Provident Fund (PPF) account, you must deposit at least Rs 500 in a financial year, but you can deposit up to Rs 1.5 lakh. This maximum limit applies to your own account and any accounts you have for minors. You can deposit in multiple installments, as long as each is at least Rs 50, with a total limit of Rs 1.5 lakh for the year. (AI image)

Public Provident Fund Calculator: At the current interest rate of 7.1%, if you invest the maximum amount of Rs 1.5 lakh in a lump sum installment, then at the end of 15 years you will get a corpus of Rs 40,68,209/- at maturity. This includes your investment of Rs 22,50,000/- and the interest of Rs 18,18,209/- (AI image)

A PPF account can be opened by a single adult resident in India or by a guardian on behalf of a minor or a person with an unsound mind. Note that only one PPF account can be opened nationwide, either in a Post Office or in a bank. (AI image)

PPF Tax Benefits: Deposits made into a PPF account qualify for deductions under Section 80C of the Income Tax Act. Additionally, the interest earned and the maturity amount are tax-free. This makes PPF a EEE or Exempt, Exempt, Exempt investment product. (Image source: Freepik)

You can take a loan from your PPF account after one year from the end of the financial year when you first opened the account. However, you must take the loan before the end of five years from the same point. The maximum loan amount is 25% of the balance in your PPF account at the end of the second year prior to the year in which you apply for the loan. You can take only one loan in a year and a second loan cannot be taken till the first is repaid. (AI image)

A Public Provident Fund account subscriber can make one withdrawal per financial year after a minimum of five years from the end of the financial year in which you opened the account. The maximum amount you can withdraw is 50% of the balance at the end of either the fourth preceding financial year or the most recent financial year, whichever is lower. To illustrate, if you make a withdrawal in the 2016-17 financial year, you can withdraw up to 50% of your balance as of March 31, 2013, or March 31, 2016—whichever amount is smaller. (AI image)

Premature closure of a PPF account is allowed, but only after five years from the end of the year when the account was opened, and only in specific cases. You can close your PPF account early if you, your spouse, or your dependent children are diagnosed with a life-threatening illness, if you or your dependent children require funds for higher education, or if your residency status changes, such as when you become a Non-Resident Indian (NRI). If you choose to close your account prematurely, a 1% penalty on the interest is deducted, calculated from the date the account was opened or extended. (AI image)

A PPF account matures after 15 years, not counting the year it was opened. When it matures, you have three options. You can close the account and withdraw all your money by submitting an account closure form and your passbook to the post office. Or, you can keep the account open without additional deposits, continue earning interest, and withdraw money at any time or once per financial year. Alternatively, you can extend the account for another five-year period, and keep extending it every five years; just submit the extension form to the post office within a year of the account's maturity. (AI image)