What is PPF? PPF full form, meaning & interest rate explained.

The Public Provident Fund (PPF) was launched in 1968 in India. PPF is one of the best long-term and safest investment options available in the country. Any individual can open a PPF Account including minors, provided they are residents of India. It was introduced to help people save and invest small amounts of money. PPF is an investment tool to accumulate wealth in a steady and safe manner. It is ideal for those seeking a secure investment option that offers returns and tax savings.

Importance of a PPF Account

PPF is an excellent option for those who prefer low-risk investments. However, it is important to understand what a PPF Account is and how you can invest in it. Investing in a PPF Account helps diversify your portfolio and provides tax benefits. To maximise your returns, you need to invest in PPF by the 5th of each month. This is because the interest is calculated based on the lowest balance between the 5th and the end of the month.

Features & benefits

ICICI Bank's Public Provident Fund Account offers several advantages and features. Here are some key features and benefits: 

• Assured returns: The PPF Account offers a guaranteed interest rate of 7.1%* annually (Q2 of FY 2024-25).
• Tax-free earnings: Deposits, interest earned and the maturity amount are all exempt from tax under Section 80C of the Income Tax Act.
• Low investment requirement: Start investing with as little as ₹ 500 and a maximum investment of ₹ 1.5 lakh per year. 
• Power of compounding: Benefit from the compounded interest earned in the PPF Account of a 15-year tenure with the option to extend in 5-year blocks.
• Loan facility: Avail loans against your PPF balance from the 3^rd to the 6^th year of investment.
• Transfer facility: PPF Accounts can be transferred from other authorised banks or post offices to ICICI Bank
• Online management: Easily manage your PPF Account online anytime and anywhere through ICICI Bank Internet Banking and iMobile app. 
• Tax savings: Save up to ₹ 46,800 in taxes annually by investing in a PPF Account.
• Flexible investment options: You can choose the frequency of your investments, whether yearly, half-yearly, quarterly or monthly, according to your convenience.

Note: *These values are subject to change and may vary in the future.

PPF Account eligibility

While understanding the importance of a PPF Account, meeting the eligibility criteria is crucial to determine if you can open one. You must fulfil the following criteria to open a PPF Account with ICICI Bank:

• You should be a citizen of India.
• You can only have one PPF Account. However, you can open a PPF Account in the name of the minor but both the accounts (the individual's and the minor's) fall under the same investment limit of  ₹5 lakh per financial year.
• A Hindu Undivided Family (HUF) or an NRI cannot open a PPF Account. However, if a HUF or an NRI have an existing PPF Account, it will stay active till its maturity.

How to open a PPF Account?

Here is the process of opening a PPF Account with ICICI Bank:

Log in to your ICICI Bank Account through Internet Banking or iMobile app: Access the ICICI Bank website or iMobile app and log in to your account using your credentials.

• Navigate to Bank Accounts: Go to the ‘Bank Accounts’ section and select ‘PPF Accounts.’
• Keep your Aadhaar Card ready: An Aadhaar Card is needed for e-Signing the digital PPF Account Opening form.
• Complete the Formalities: Enter the required details, set up standing instructions for regular contributions and E-sign the application.
• Account Creation: Once completed, your PPF Account will be created and funds will be debited from your ICICI Bank Savings Account.

PPF withdrawal rules & procedures

According to the withdrawal regulations, you can access the funds from your PPF Account once they reach maturity. This means that after the 15-year PPF lock-in period, you can withdraw the accumulated funds with interest and close the Account. Partial withdrawals are allowed only after the completion of 5 financial years, after the end of 1st year in which the deposit was made.

To withdraw funds from your PPF Account, follow these steps:

• Get the Form: Get the withdrawal application form (‘Form C’) from ICICI Bank.
• Fill the Form: Complete the form with the required information.
• Submit the Form: Submit the completed Form to the ICICI Bank Branch where your PPF Account is held.

Conclusion

Public Provident Fund (PPF) is ideal for all Indian citizens, including minors. While the full amount can only be accessed after 15 years, partial or early withdrawals are allowed. This scheme serves as a long-term savings option and retirement savings tool, offering wealth accumulation and tax benefits for investors.