PPF Scheme 2025: If you do not know these 5 rules then forget about huge profits..
When it comes to safe investment, guaranteed returns, and tax saving, only one name comes to everyone's lips - Public Provident Fund (PPF). This is the 'superhero' of small savings schemes on which the government itself gives a guarantee, that is, your money is 100% safe.
But do you know that just depositing money is not enough to earn huge profits from this scheme? The government has recently made small and big changes in some of its rules, without knowing which ones you cannot take full advantage of. Today, we will decode the 5 most important rules of PPF, which will help in increasing your money rapidly.
First step: These forms have changed
If you are going to open a PPF account or want to continue it even after 15 years, then note these changes. Earlier, Form-A had to be filled out to open a new account, but now you will have to submit Form-1. If you want to deposit money even after maturity, then now you will have to apply by filling Form-4 instead of Form-H. This is a small but important change.
How much loan will you get? Understand the 2-year rule.
You can also get a loan on PPF. But how much? Its rule is a bit complicated. You get the loan amount not on your current balance, but on the basis of the balance in your account exactly 2 years before the date of application. You can get a maximum of 25% of that balance as a loan. If you apply for a loan on 15 August 2025, then the bank will see how much money was in your account on 15 August 2023. If there were ₹ 2 lakh on that day, then you would get a maximum loan of ₹ 50,000.
Now you will have to pay less interest on the loan.
This is a big relief for PPF account holders. Earlier, you had to pay 2% more interest on PPF loan than the interest you were getting on PPF account. But now this rule has been changed. Now you will have to pay only 1% more interest. If you are getting 7.1% interest on PPF, then you will have to pay only 8.1% interest on the loan. This is much cheaper than a personal loan.
After maturity: Earn interest without doing anything
If you do not need money after completion of 15 years, then you have a great option. You can continue your PPF account without depositing any new money. You will continue to get interest on all the money deposited in your account according to the current interest rate of PPF. You can withdraw this money whenever you want.
Continue investing, increase wealth.
If you want to continue investing even after 15 years, then you can extend your account in blocks of 5-5 years by filling out Form-4. Once you choose the option of extension, you can withdraw money only once in a financial year.
Only one transaction in a month
This is a rule that most people are not aware of. You can deposit a minimum of ₹500 and a maximum of ₹1.5 lakh in a financial year. However, you can deposit money in your PPF account only once a month. You can deposit ₹1.5 lakh or ₹500 in one go, but cannot make a second transaction in a month.
EEE Status: Triple benefit in tax
Why is PPF called the best tool to save tax? Because it has the status of EEE (Exempt-Exempt-Exempt). First E (Exempt): The amount invested by you up to ₹1.5 lakh is tax-free (under section 80C). Second E (Exempt): The interest received on it is completely tax-free. Third E (Exempt): The entire maturity amount received after 15 years is also tax-free.
5 big benefits of investing in PPF
Government guarantee. Your money is 100% safe. Better than many small savings schemes and guaranteed returns (currently 7.1%). The benefit of tax exemption. Money grows rapidly by earning interest on interest (magic of compounding). Facility of loan and partial withdrawal at the time of need.
Don't forget these things.
Minimum investment: ₹500 per annum. Maximum investment: ₹1.5 lakh per annum (for tax exemption). Lock-in period: 15 years. Interest calculation: Annual compounding. Loan facility: Available from the third to the sixth year of opening the account.
Be smart, choose the right investment.
Public Provident Fund (PPF) is still a great option for those investors who want to grow their money without any risk and also want to save tax. If you invest in PPF, keeping in mind the above mentioned rules, then you will not only be able to create a big fund but will also feel financially secure. This is a disciplined investment path that can help you meet your long-term financial goals. Always confirm the latest interest rates and terms with your bank or post office before investing.
Disclaimer: This content has been sourced and edited from Zee Business. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.
