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SBI PPF | Public Provident Fund Scheme, Calculator, Interest Rate

What is the Public Provident Fund (PPF) Scheme?/ what is PPF account ?. The Public Provident Fund (PPF) Scheme, 1968 is a tax-free savings avenue that was introduced by the Ministry of Finance (MoF) in India in the year 1968. Interest earned on deposits in the PPF account are not taxable. Deposits made towards PPF accounts can be claimed as tax deductions. This makes the PPF Scheme one of the most tax-efficient instruments in India. It was launched to encourage savings among Indians in general, especially to encourage them to create a retirement corpus.

Key Features of the PPF Scheme:

The main things to note about PPF accounts are outlined below.

  • Interest rates: Interest rates are announced by the central government periodically, usually annually. Interest earned is compounded yearly. (The current rate of interest on a PPF account is fixed at 8.1% p.a.)
  • Tenure: 15 years; account continuance is allowed beyond maturity for 5 years at every renewal, with or without making additional deposits.
  • Initial investment/deposit: Rs.100 to open the account
  • Annual Deposit amount: Rs.500 – Rs.1.5 lakhs per year (can be revised as per government directive)
  • Deposit frequency: A deposit has to be made every year, for 15 years, to keep the account active. Failure to make the minimum annual investment will render the account inactive.
  • Deposit modes: Via cash, cheque, PO, DD, online funds transfer; as a one-time deposit or up to 12 installments.
  • Withdrawals: Partial premature withdrawals can be made every year from year 7; withdrawals are subject to conditions. Complete withdrawal of funds can be made only at maturity.
  • Tax advantages: Interests are tax-free and deposited amounts are tax deductible U/S 80C of the Income Tax Act. Withdrawals are exempt from wealth tax.
  • Nomination: Allowed; on opening the account or after.
  • Fund transfer: Funds/accounts cannot be transferred between people but can be easily transferred between bank branches or post offices for free.
  • Loan facility: Loans can be availed against funds held in the PPF account from year 3 to year 6.
  • Renewal: Renewal or extension of the scheme is allowed, for an extra 5 years at a time.

Benefits of investing in a PPF Scheme:

  • Attractive long-term investments: With a deposit period of 15 years and a lock-in period of 7 years, these accounts serve long-term investment goals. With interest rates compounded annually, effective returns tend to be more attractive vis-a-vis bank FDs.
  • Useful for retirement planning: Long-tenures, compounded, tax-free returns and capital protection make this an ideal option for building a retirement corpus.
  • Tax-free returns: Tax-free interest and withdrawals and tax-deductible investments.
  • Low-risk: Being government-backed, there is low risk of default.
  • Easily accessible: PPF accounts can be opened at nationalized, public banks or post offices and select private banks, all of which have wide reach. Accounts can be opened online as well.
  • No attachment: PPF funds can’t be attached under court order or laid claim to by creditors.

Some Facts About PPF

  • Interest rate : 8.1%
  • Duration of scheme : 15 years
  • Minimum deposit amount (per year) : 500
  • Maximum deposit amount (per year) : 1,50,000
  • Number of installments every year : 1 (Min) to 12 (Max)
  • Number of accounts one can open : Only One
  • Lock-in period : 15 years (partial withdrawals can be made from the sixth year)
  • Extension of PPF Account : After the maturity period (15 years), it can be extended for a period of 5 years
  • Tax savings (contribution) : under section 80C (upto 1.5 L)
  • Tax savings (interest earned and final amount) : fully exempted from wealth tax

PPF Interest Rates:

From 1.10.2016, PPF interest rate are as follows:- 8.0% per annum (compounded yearly).

Type of AccountMinimum Amount for OpeningMinimum DepositMaximum Deposit
Public Provident Fund(Individual account on his behalf or on behalf of minor of whom he is the guardian)INR 100/-INR. 500/- in a financial yearINR. 1,50,000/- in a financial year

Documents needed to open a Public Provident Fund Account (PPF a/c):

Documents required to open a PPF account are KYC documents such as identity proof, address proof and signature proof. These commonly include the latest version of a person’s

  • Passport, PAN Card, Aadhar Card, Driving License, Voter’s ID, Employer’s letter, Utility Bill, Rental/Lease Agreement, Bank Account Statements, Ration Cards, Signed Cheque
  • Photographs
  • The account opening form, along with nomination form if nominees are being named.
  • This is not an exhaustive list. Banks may request additional documents if necessary.In case of minors, age proof will be required i.e. the minor’s birth certificate or school certificate.

SBI PPF account rules and guidelines

Certain rules and guidelines apply to PPF account opening with SBI. These rules and guidelines are to make customers aware about the various aspects of ppf account in SBI.

  • Duration of SBI PPF schemeSBI offers PPF scheme for an initial duration of 15 years after which customers can request extensions in blocks of 5 years. One or more such 5 year blocks can be requested by customers.
  • Eligibility criteria to avail SBI PPF schemeAll Indian individuals can avail the SBI PPF scheme either in their own name or in the name of minors. Hindu undivided families are not permitted to avail a single PPF scheme in their name.
  • Investment limit for PPF accountA minimum investment of Rs.500 per annum or a maximum of Rs.1,50,000 per annum can be deposited as PPF amount. Any amount higher than Rs.1,50,000 earns neither interest nor any tax rebate and hence should not be invested. The amount deposited in the PPF account can either be deposited via single payment or via twelve installments per year.

Interest rate on SBI PPF scheme

SBI offers an attractive interest rate for PPF account holders. Currently, the rate is 8.7% per annum and translates into a better rate than any other investment option since the returns earned are totally tax-free. SBI pays the interest for full year on March 31st. The applicable interest amount is calculated on the minimum balance between the 5th and the last day of a month.

SBI PPF account Calculator

SBI PPF calculator is a great financial tool to help you plan your PPF investment. The calculator takes into account the monthly or yearly investment that you are ready to make and also the applicable rate of interest and then computes the interest paid out to you over the 15 years of deposit period. This calculator is helpful in letting customers know the exact amount of return that they can get on their investment if the rate of interest doesn’t change. Using the PPF calculator also gives customers a general idea about how much investment is required for the end gain that they are expecting. This helps customers in planning their finances in a better way.

Key Points:

  • Only one PPF account can be maintained by an Individual, except an account that is opened on behalf of a minor.
  • A penalty of Rs. 50 will be levied per year of default, if the customer doesn’t deposit the minimum deposit amount of Rs. 500 on the completion of the financial year.
  • A customer can extend the tenure of a Public Provident Fund (PPF) investment for a block period of 5 years beyond the maturity period by submitting Form H within one year from the date of maturity.
  • No premature withdrawal is allowed for Public Provident Fund (PPF) accounts. Only in the case of the death of a customer, their nominee /legal heir can close the account by submitting the required documents as guided by the Ministry of Finance.
  • Customer can make one withdrawal every year, from the 7th financial year, of an amount that does not exceed 50% of the balance of the customer credit at the end of the fourth year immediately preceding the year of withdrawal or the amount at the end of the preceding year, whichever is lower.
  • Customers can avail of the loan facility between third financial year to sixth financial year ie. from third financial year upto end of fifth financial year.

How to access SBI PPF account online:

We now look at how SBI PPF Online system provides better advantage compared to other Online PPF Account. Below are the steps listed before you try to access the SBI ppf account details, you need to visit the nearest SBI Bank to gain the user name and password access. In this post we will let you know how to access SBI PPF Account Online

Step 1) Once you have the User Name and Password to access the State Bank of India PPF  you need to visit the website >>> https://www.onlinesbi.com/

Step 2) Click on Personal Banking >>> Login

Online SBI Login

step 3) You will now be prompted to a new link >>> https://retail.onlinesbi.com/retail/login.htm

Online SBI Login 2

step 4) Now enter the User Name and Password of SBI PPF Online.

Online SBI Login 3

Step 5) You will not be able to access the Investments made to SBI PPF Account and Interest earned at the end of every year 31st March.


If you look at the above Green Tick Mark and Red Cross Mark., it clearly indicates how this user has been depositing the PPF Savings for the last two years. Say Apr 2 – 2014 and Apr 1 – 2014. However, the investment made in June 18th 2012, Dec 22nd 2011 and July 13 2011.

From the above PPF Online Statement we can clearly understand the Best time to invest in PPF account is between 1st April – 5th April in any financial year.

FAQs about PPF Accounts

1. Can I increase my investment under the PPF scheme by opening 2 or more accounts in my name?

No. Under the Public Provident Fund Scheme, a person can hold and operate only one account in his/her name.

2. Can I continue to use an inactive account?

Yes. You can do so by paying the holding branch a penalty of Rs.50 for every year the account was inactive. You will also have to deposit a minimum of Rs.500 for every year the account was inactive as well as Rs.500 for the year you are activating the account.

3. Will I continue to earn returns if my account is inactive?

No. Interest will not be calculated for the year(s) the account is inactive. Once the account is revived, interest will be calculated on the balance held at time of revival.

4. If I open a PPF account in my minor child’s name, can I claim tax deductions from both accounts i.e. my child’s and mine, when I file taxes?

The maximum investment cap of Rs.1.5 lakhs applies to all contributions you make to your account, your minor child’s account and/or your spouse’s account, collectively. Only amounts up to Rs.1.5 lakhs can be claimed as deduction U/S 80C of the Income Tax Act. For e.g. if you contribute Rs.1 lakh toward your account and Rs.1 lakh toward your child’s account, you can claim only Rs.1.5 lakhs as deduction and not Rs.2 lakhs.

5. What if I wish to invest more money than the Rs.1.5 lakh limit?

Interest will be calculated and paid out only on amounts up to Rs.1.5 lakhs for any year. Only the maximum annual investment limit i.e. Rs.1.5 lakhs a year will be considered towards all calculations for all purposes.

6. The limit was raised from Rs.1 lakh to Rs. 1.5 lakh mid-way through 2014. If the limit is raised this year in the same way, how will I make the additional deposit? Should I wait for next year?

When the limit is raised during a financial year, banks and post offices are instructed to accept additional investments if investors wish to contribute up to the revised maximum limit. This is what was done last year for those who wished to contribute up to Rs.1.5 lakhs under the revised limit.

7. How is interest calculated? I got interest for 11 months instead of 12 months for the last year.

For any given month, investments made on or before the 5th will be considered for interest calculations for that month. Interest is calculated on the lower of the balance held on the 5th of a month to the end of the month.

For e.g. An account held Rs.1 lakh at the start of September. The account holder decided to invest Rs.50,000. He did so on September 10th. In this case, the balance on the 5th of September was Rs.1 lakh and was Rs.1.5 lakhs at month-end. Here, Rs.1 lakh is the amount that will be considered for calculation of interest. The additional investment of Rs.50,000 would be considered for the month of October.

If, however, the account holder had deposited the additional Rs.50,000 on September 3rd, the balance on the 5th of September would have been Rs.1.5 lakhs. This would have been the amount considered for interest calculations for the month of September.

8. I want to leave some money to my grandchild. Can I open the PPF account on her behalf?

No. Grandparents cannot open PPF accounts in their grandchildren’s names. The amount can be given to the parent/guardian who can open and operate the account in the name of their minor child/ward. However, if both parents of the minor child die, the grandparents, as guardians, can open and operate a PPF account for the minor child.

9. Is it mandatory to withdraw all the money in my PF account at the end of 15 years?

No. It is not necessary to redeem all the funds held in the account at maturity. The account term can be continued or extended for as long as the investor wishes to operate it. The account can be continued for 5 years per extension. Extensions can be done by depositing fresh funds or without making any further deposits.

10. Will I continue to earn interest on my account if I extend the maturity period beyond 15 years?

Yes. Interest will be calculated and paid out based on the interest rates prevailing during the period of extension. If no fresh deposits are made during the period of extension, interest will be calculated based on the balance held at the end of the 15th year. If fresh deposits are made to extend the term, it will be added to the balance at the end of the 15th year and the total amount will be treated as principal for interest calculations.

11. Can I extend my account for 2 years on maturity?

Extensions can be made in blocks of 5 years each.

12. What happens to the money in my account if I die before maturity?

It can be claimed by the nominees or the legal heirs in the absence of nominees. If a nominee was named by the account holder, he/she will receive the entire amount held in the account. If more than one nominee was named, the nominees will receive funds held in the account proportionately i.e. as stated by the account holder in the nomination form.

13. Is it necessary to name nominees?

It is not mandatory to name nominees for a PPF account. However, it is advisable to do so to avoid conflicts in the event of death and to have a clear transfer of funds to a desired person.

14. How can a nominee/legal heir claim funds in a PPF account?

Nominees or legal heirs can claim funds in a PPF account when the account holder has passed away. They will be required to produce proof of death of the account holder. Nominees can claim funds in the proportion stated by the account holder in the nomination form.

15. How long can I extend my account for?

PPF accounts have a maturity period of 15 years. However, this can be extended for as long as the account holder wishes to continue it. Extensions can be done for 5 years at a time. For e.g. if an account matures on March 31st 2015, it can be extended till March 31st 2020. The next extension will be until March 31st 2025 and so on.

16. I deposited money in my wife’s PPF account. Who can avail the tax deduction?

In this case it will be you who will be able to avail the tax deduction. The person making the contribution is eligible for tax deductions U/S 80C.

17. I deposited money in my parents’ PPF accounts but did not qualify for tax deduction U/S 80C. Why?

Only contributions made to an account holder’s own account, his/her spouse’s account or his/her minor child’s account can be claimed as deductions U/S 80C of the Income Tax Act. The total contribution to any one or all of the abovementioned person’s account is subject to the investment cap of Rs.1.5 lakhs per annum.

18. If I withdraw money from my PPF account, can I redeposit it to meet the minimum annual investment requirement?

Yes, you can withdraw money for personal purposes. It can be used to invest the Rs.500 required as annual investment.

19. Can I open a PPF account along with my wife or child?

No. The option to hold PPF accounts jointly is not provided under the PPF scheme. A person can hold and operate only one account in his/her own name.

20. If I need money, can I make withdrawals in addition to taking out a loan against my PPF account?

No, withdrawals and loans are exclusive of each other as per the rules of operating a PPF account. Loan facilities are extended to account holders only between the 3rd and 6th year of operating an active account whereas partial withdrawals are allowed from the 7th year onwards. This means you cannot avail a loan from the 7th year onwards nor can you make withdrawals before the 6th year.

This scheme was devised to promote savings and while loans and withdrawals are allowed to a certain extent to allow for some liquidity, the scheme, in general, does not aim to encourage a reduction in savings potential.

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