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Post Office Public Provident Fund Account: Interest Rate, Income Tax Benefits, Other Details

Investment under the post office PPF account qualifies for income tax benefits under Section 80C of the Income Tax Act

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Post Office Public Provident Fund Account: Interest Rate, Income Tax Benefits, Other Details

Post office PPF account can be opened by cash or cheque.


India Post or Department of Posts, the postal system of the country, provides a range of services. The Department of Posts offers several savings schemes with different interest rates which move in line with the government's interest rates on small savings schemes, which are revised on a quarterly basis. For the first quarter of financial year 2019-20, the government has left the small savings schemes' interest rates unchanged at existing levels. One such savings scheme offered by India Post is 15-year Public Provident Fund (PPF) Account, according to its official website, indiapost.gov.in. A PPF subscriber cannot close the account before completing the 15-year period.

Here are 5 things to know about the post office Public Provident Fund (PPF) Account:

1. Account opening: A post office PPF account can be opened by cash or cheque. In case the account is opened by cheque, the date of realisation of cheque in government's account shall be date of opening of account. One can also open a joint account.

2. Amount: An individual needs a minimum of Rs 100 to open the account but has to deposit Rs 500 in a financial year. The maximum limit in a financial year is Rs 1,50,000, according to India Post's portal. Deposits can be made in lump-sum or in 12 installments. 

3. Interest rate: A post office PPF account offers an interest of 8 per cent per annum, which is compounded yearly.

4. Income tax benefits: Investment under the PPF account qualifies for income tax benefits under Section 80C of the Income Tax Act, 1961. Interest earned is also tax-free, noted India Post.

5. Other facilities: One premature withdrawal is permissible every year from the seventh financial year from the year of opening the account. Customers can also avail loan facility, which is available from the third financial year.



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