Benefits of Public Provident Fund (PPF)

If you are looking to grow your money while also getting tax benefits, then open a PPF Account. It is a government-backed investment option that ensures the safety of your money and helps you reach your long-term financial goals with ease.

Benefits of PPF

PPF (Public Provident Fund) is one of the few investment plans in India with the Exempt-Exempt-Exempt (EEE) tax status. EEE means that you save tax thrice:

• The amount deposited in the PPF Account every financial year is exempt from tax (up to ₹ 1.5 lakh under Section 80C)

• The interest earned in the year is tax free as well

• The maturity amount (the principal sum + interest) at the end of the PPF term is also free from tax.

Apart from tax savings, there are other reasons which make PPF a good investment option. Here are a few of them:

Can be treated as a pension plan

PPF is similar to a good pension plan, due to its decent returns and long tenure. However, unlike other pension plans where the pension income is taxable, the interest earned on the PPF Account balance and the maturity amount are both tax-free.

Investment security

Being a government-backed scheme, you can be assured of the safety of your funds.

Long-term returns

The tenure of a PPF Account is 15 years, which can be extended in blocks of 5 years after maturity. Staying invested for a long period like this helps you accumulate a sizeable corpus for goals like children’s higher education or wealth creation. PPF mobilises small and regular savings from investors into long-term capital appreciation.

Interest Rate

PPF offers an attractive interest rate of 7.1% per annum as of August 2025. It is also important to note that the PPF interest earned is tax-free under Section 10 of the Income Tax Act, which means there is no need to pay any tax on your earnings.

Facility to extend the tenure

As a subscriber, you can extend your PPF Account in blocks of 5 years after the lock-in period of 15 years. You can thus continue to earn assured and good returns for a long period.

Invest small, earn big

With a PPF Account, you can start with a minimum investment of as low as ₹ 500 and go up to a maximum of ₹ 1,50,000 per year.

Partial withdrawal

You are allowed to make a partial withdrawal after the completion of 5 complete financial years from the date of opening the PPF Account for certain reasons. Thus, some of your funds are accessible to you in times of need.

Facility of loan against PPF

As a subscriber, you can apply for a loan against your PPF Account without any collateral/security. Please note that you can avail the loan from either the 3^rd or 6^th year.

Available to minors

Indian resident minors can also have PPF Accounts. However, this Account has to be opened and maintained by the child’s parent or legal guardian.

Online access

If you have an ICICI Bank Savings Account and open your PPF Account with ICICI Bank as well, you can deposit funds from your Savings Account into your PPF Account easily using our digital banking channels, i.e.  Internet Banking and iMobile.

FAQs

Can I extend my PPF Account after the 15-year maturity period?

Yes, you can extend your PPF Account in blocks of 5 years after maturity, with or without new contributions. This way, you can continue to earn interest on your savings. It’s one of the key benefits of PPF.

Is a PPF Account better than other tax-saving investments?

Every investment has its own advantages and limitations. PPF, in addition to triple tax benefits due to the EEE status, also offers assured returns, making it ideal for conservative investors.

Is there any tax levied on PPF withdrawals?

No, there is no tax on PPF withdrawals.The interest earned as well as the maturity amount are completely tax-free under Section 10 of the Income Tax Act.