Public Provident Fund (PPF) was launched in 1968 by the Finance Ministry’s National Savings Institute. PPF is a savings scheme or a tax-free scheme that is offered by the Government of India. It is used as a tool by the investors to build a corpus for their retirement by saving sums of money regularly, over a long period of time.
The PPF accounts can be opened at any post office or in any authorized bank. The minimum deposit amount is Rs. 500 per annum and the maximum limit is Rs 1,50,000 per annum. A PPF account matures after the completion of 15 years from end of the year in which the account was opened. At maturity, you can extend the PPF account indefinitely in blocks of 5 years at a time. The interest on the account is set every quarter and is paid by the Government of India. The applicable PPF interest rate for this quarter is fixed at 7.1%. There can be a maximum of 12 contributions in a year. The interest and maturity proceeds are exempted from tax, under Section 80C of Income Tax Act. The feature of transfer of PPF account can be availed to transfer between different branches of the same bank or transferred from post office to bank.