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Is PPF Account good for investment?


Date: 27 Dec 2015   Posted By: Pushpa     Group: Finance and Investments    Category: Investments   

I need some information about PPF Account. I have heard PPF account is good for long term investment. What are the formalities to open PPF account in post office? If we invest in this account is it possible to withdraw money after some years like 2-3 years or should wait until 15 years?

Wondering whether it is good to invest in PPF? Get expert advice and guidance from this page.


Author: Kranthi Kumar (K K)    27 Dec 2015      Member Level: Gold     Points : 4  (Rs 4)    Voting Score: 0

In PPF amount invested is generally locked for 15 years time. But there is an option to withdraw part of the amount invested after 6 years time.

Suggested Reading : Public Provident Fund (PPF)

If you are looking for a period of 2-3 years, PPF is not a right option for you. Alternative options are as follows:
1. Fixed Deposits.
2. Postal Savings Schemes
3. You can think of investing in high quality stocks with supervision of some expert. This will generally gives smart returns YOY compared to (1) and (2).

We are happy to help you on this, If you have any further questions..


Author: Partha Kansabanik    27 Dec 2015      Member Level: Diamond     Points : 3  (Rs 3)    Voting Score: 0

PPF Account is a must for salaried individual for long-term safe investment. The current interest rate is 8.7% p.a. However, presently the rate of interest of PPF subscription is linked with market rate. So, it is liable to be changed.

For opening a PPF A/c in Post Office, an investor is required to submit PAN card, AADHAR card and residence proof. He/She is also required to submit proof of relationship with the nominee and photographs of self. The minimum amount of investment is Rs. 500/- p.a. and the maximum is Rs. 1,50,000/- p.a.

The PPF A/c is valid for 15 years extendible for 5 years slab. A person can withdraw his/her 1st year's subscription as loan on 6th year only. Evidently, PPF is for long-term investment.

I would advise the author of this thread to open a PPF A/c in the particular Bank Branch where his/her salary A/c is maintained, so that on receipt of salary every month, he/she can simply transfer online an amount religiously in his/her PPF A/c.


Author: Pushpa    27 Dec 2015      Member Level: Bronze     Points : 0    Voting Score: 0

Thank you for your suggestions.

Author: Kailash Kumar    27 Dec 2015      Member Level: Platinum     Points : 2  (Rs 2)    Voting Score: 0

The author may refer my following article regarding the subject matter for salient features of PPF account -
http://www.indiastudychannel.com/resources/167288-Public-Provident-Fund-PPF-Account-An-investment-option.aspx
In addition to above a number of other resources are available in ISC repository which can be easily located by using search feature of ISC. PPF is one of the best investment options available for investors from the point of view of small savings as well as from the angle of income tax planning point.


Author: Mahesh    28 Dec 2015      Member Level: Gold     Points : 3  (Rs 3)    Voting Score: 0

The current year 2016-2017 will have a revision for the interest rate. It is possible that the rate may go down to 7.50%. However PPF has lot of advantages such as following -

1. No tax on withdrawal
2. Tax saving during investment
3. Safe investment
4. Longer lock in period
5. Better returns post taxation compared to FD, NPS and Post MIS.

That being said, you should only invest into it if you have long term plan for it. Otherwise it is better to do SIP into equity. Most likely things are going to be uncertain in nearest future. And for this reason make sure you have some money in NPS, Post MIS along with PPF. This ensures that your risk is spread out.


Author: T.Krishnamoorthy    29 Dec 2015      Member Level: Gold     Points : 3  (Rs 3)    Voting Score: 0

First of all we must understand the place for investment and saving. PPF is not the place of investment but it is the place for saving. Investment is those place where we can put our hard earned money to multiply even taking risk. As for as the saving is concern, it is the place where we put our hard earned money safe with a nominal increase of interest. If you want to invest money then land is best option. In case of saving, the best option is GPF, PPF, FD in nationalized banks etc.

Author: Pushpa    29 Dec 2015      Member Level: Bronze     Points : 0    Voting Score: 0

Thank you for your valuable suggestions.




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