If you looking for a safe investment option to generate a sizeable retirement corpus, you can opt for the post office Public Provident Fund (PPF). With a minimum investment of just Rs 500, you can start building a large fund over time. It is backed by the government and currently offers a fixed interest rate of 7.1 per cent. With tax benefits on investments up to 1.5 lakh in a year, PPF is an attractive option for long-term financial goals like retirement planning.

PPF Account: Post Office vs Bank – Which is better for you?

When choosing where to open a PPF account, you can opt for either a bank or a post office, as both offer the same rules and benefits.

Who can open a PPF account?

1. Resident Indian Adult: A single adult who is a resident of India can open a PPF account.
2. Guardian for Minor/Person: A guardian can open a PPF account on behalf of a minor or a person.
Only one PPF account can be opened across the country, either in a post office or a bank.

What are deposit rules in PPF?

1. Minimum and Maximum Deposit: The minimum deposit required in a financial year is Rs 500, while the maximum deposit allowed is Rs 1.50 lakh.
2. Combined Deposit Limit: The maximum limit of Rs 1.50 lakh applies to the combined deposits made in: Your own PPF account or a PPF account opened on behalf of a minor.

What are PPF account maturity options?

The account matures after 15 financial years, excluding the financial year of account opening.

What are the options available to a PPF account holder upon maturity?

The depositor can take the maturity payment by submitting the account closure form along with the passbook at the concerned Post Office.

The depositor can retain the maturity value in the account without making further deposits, and the applicable PPF interest rate will still be earned; the payment can be taken at any time, or one withdrawal can be made per financial year.

The depositor can also extend the account for a further block of 5 years, and so on, within one year of maturity, by submitting the prescribed extension form at the concerned Post Office.

What are PPF account withdrawal rules?

Here are the rules regarding withdrawals from a PPF account:

A subscriber can make one withdrawal per financial year, but only after five years from the date of account opening, excluding the year of account opening.

The amount of withdrawal allowed is up to 50 per cent of the balance credited to the account at the end of the fourth preceding year or the end of the preceding year, whichever is lower.

Post office PPF calculation conditions

• Investment amount: Rs 4,000, Rs 8,000, Rs 12,000
• Annualised rate of return: 7.1 per cent
• Investment period: 15 years

What will be PPF corpus after 15 years with an investment of Rs 4,000 per month?

Annual investment: Rs 48000 (4,000×12)
Your total investment amount over 15 years will be Rs 7,20,000. The estimated interest earned during this period will be Rs 5,81,827 and the estimated maturity amount will be Rs 13,01,827. 

What will be PPF corpus after 15 years with an investment of Rs 8,000 per month?

Annual investment: Rs 96,000 (8,000×12)
Your total investment amount over 15 years will be Rs 14,40,000. The estimated interest earned during this period will be Rs 11,63,654 and the estimated maturity amount will be Rs 26,03,654.

What will be PPF corpus after 15 years with an investment of Rs 12,000 per month?

Annual investment: Rs 1,44,000 (12,000×12)
Your total investment amount over 15 years will be Rs 21,60,000. The estimated interest earned during this period will be Rs 17,45,481 and the estimated maturity amount will be Rs 39,05,481.

(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)