What is the Minimum Lock in Period for PPF Account?

Since its launch in 1968, the Public Provident Fund (PPF) has become one of the most popular investment schemes among the Indians. Its main objective is to encourage the citizens to invest their savings regularly by providing tax-free returns to them. This article will help you to know about the minimum lock-in period and other important details regarding a PPF account.

You can open a PPF account with any post office or authorised bank to invest under the PPF scheme of the Government. PPF is a long-term investment scheme where you can invest to earn guaranteed, tax-free returns. The interest earned on the investments in a PPF account are exempted from income tax under section 80C of The Income Tax Act.

As per the rules, any Indian citizen can open a PPF account and invest in it every year. An individual cannot open more than one PPF account under his/her name. Also, opening a joint PPF account is not permitted. However, two or more accounts can be opened and held by an individual in the name of his/her minor children.

A PPF account comes with a specified lock-in period of 15 years. However, you should keep in mind that in case of PPF, the lock-in period in not calculated from the date of opening the account. Instead, it’s calculated from the date of end of the financial year in which the first deposit was made in the account.It means that you cannot withdraw funds from your PPF account before the completion of 15 years from the ending date of financial year in which you made your first deposit in your PPF account. It does not matter in which month or date you opened your account.For example, let’s assume that you made your first deposit in a PPF account on 26thJuly 2019. In such a case, the lock-in period of 15 years will be calculated from the date of ending of the financial year 2019-20, i.e. 31stMarch 2020. Hence, your account will get matured on 1stApril 2035 and you will not be able to withdraw any amount before that. The Final Word PPF is one of the best savings schemes available in India where you can invest to earn guaranteed, tax-free returns and build a long-term corpus. The minimum amount that needs to invested in a PPF account is Rs.100 annually. Also, the maximum amount invested in a year should not exceed Rs.1.5 lakh or else, no interest will be earned on the excessive amount.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.