The Public Provident Fund (PPF) is a statutory small savings scheme for the general public. The scheme was introduced by the Government of India under the PPF Act, 1968. Today, the PPF account is a popular saving scheme for individuals looking to earn guaranteed returns on their investments. Moreover, the PPF scheme is an EEE scheme wherein the investments made, returns earned and even the redemption amount enjoy tax benefits. This tax-saving nature and guaranteed returns offered make the PPF scheme popular.
If you want to invest in the PPF scheme, you can open an account in a bank or a post office. To open an account, however, you should know the PPF deposit limit as well as the withdrawal limits of the scheme. So, let’s have a look at the PPF limits in details –
You can open a PPF Account with a minimum deposit of Rs.100. Once opened, you would have to keep on depositing at least once in a financial year in the PPF account till the account matures. A minimum deposit of Rs.500 should be made in one financial year. The PPF Account has a tenure of 15 years which can be further extended by another 5 years. During these 15 years, you would have to make at least one deposit of a minimum amount of Rs.500 to keep the account active.
While the minimum deposit is Rs.500, the PPF maximum deposit limit is Rs.1.5 lakhs in one financial year, i.e. between April and March. You cannot deposit more than Rs.1.5 lakhs in the PPF Account in any given financial year. The deposit frequency, however, is not limited. Earlier, the PPF account max deposit was twelve times in one financial year. However, the Government changed this rule in 2019. Now, you can deposit any number of times in one financial year. These multiple deposits can start from as low as Rs.50. So, while you can make deposits unlimited number of times, the aggregate value of such deposits should not exceed Rs.1.5 lakhs which is the PPF maximum deposit limit.
If you extend the PPF tenure beyond 15 years, you can do so by submitting a request with the bank or post office within a year to maturity of the scheme. If the deposit tenure is extended, you would have to keep making the minimum deposit of Rs.500 every year to keep the account active. Moreover, during the extended duration of the scheme, the PPF account deposit limit would not change. A maximum deposit of Rs.1.5 lakhs per year would be allowed even during the extended deposit tenure.
Alternatively, you can choose not to extend the maturity duration of the scheme but remain invested in it even after maturity. If you do so, you would not have to make any deposits. The PPF account would continue earning interest on the accumulated balance.
PPF is a long term saving scheme. If you need funds within the tenure of the deposit, you have the following alternatives –
A PPF account requires a minimum contribution of Rs. 500 and a maximum contribution of Rs. 1.5 lakhs. This indicates that you cannot invest more than Rs. 1.5 lakhs in a PPF account per year. The contribution can be made at any time of year and in any amount. The maximum number of contributions permitted in a calendar year is 12.
Q1. What is the maximum limit of PPF?
The annual maximum deposit amount in PPF account is Rs. 1.5 lakhs.
Q2. Can I deposit 2 lakhs in a public provident fund account?
No. You cannot deposit more than 1.5 lakhs in a PPF account.
Q3. What is the interest rate of a PPF account?
The interest rate for FY 2021 – 2022 is 7.1%.
Q4. Can I have two PPF accounts?
No, you cannot have more than one PPF account.
Q5. Is the PPF better than an FD?
Both the schemes offer tax benefits, but FDs have a shorter lock in period.