The Public Provident Fund is a savings-cum-tax-saving instrument in India, introduced by the National Savings Institute of the Ministry of Finance in 1968. The aim of the scheme is to mobilize small savings by offering an investment with reasonable returns combined with income tax benefits. The scheme is fully guaranteed by the Central Government. Balance in PPF account is not subject to attachment under any order or decree of court. However, Income Tax & other Government authorities can attach the account for recovering tax dues.

Public Provident Fund Scheme, 2019 introduced by the Government on 12 December 2019 and with the new scheme the earlier Public Provident Fund Scheme, 1968 as amended from time to time is rescinded.

Eligibility
Individuals who are residents of India are eligible to open their account under the Public Provident Fund, and are entitled to tax-free returns.

Non resident Indians
As of August 2018, as per the Indian Ministry of finance (Department of Economic Affairs), NRIs (Non resident Indians) are not allowed to open new PPF accounts. However, they are allowed to continue their existing PPF accounts up to its 15 years maturity period. An amendment to earlier rules allowing NRIs to invest in PPF was proposed in the finance bill 2018, but has not yet been approved.

In October 2017, a notification was passed by the Ministry of finance regarding an amendment to the PPF scheme of 1968, which would deem a PPF account closed from the day a person became a non resident. This led to much confusion. Subsequently, the ministry issued an office memorandum in February 2018 keeping the above notification in abeyance till any further order in this regard, thus bringing the situation to the same stance as earlier.

Investment and returns
A minimum yearly deposit of ₹500 is required to open and maintain a PPF account. A PPF account holder can deposit a maximum of ₹1.5 lacs in his/her PPF account (including those accounts where he is the guardian) per financial year. There must be a guardian for PPF accounts opened in the name of minor children. Parents can act as guardians in such PPF accounts of minor children. Any amount deposited in excess of ₹1.5 lacs in a financial year will not earn any interest. The amount can be deposited in lump sum or in instalments per year. However, this does not mean a single deposit once in a month.

The Ministry of Finance, Government of India announces the rate of interest for PPF account every quarter. The interest rate compounded annually and paid on 31 March every year. Interest is calculated on the lowest balance between the close of the fifth day and the last day of every month.

Interest rates
1986–2016

Period Interest Rate
April 1986 – January 2000 12.0%
January 2000 – February 2001 11.0%
March 2001 – February 2002 9.5%
March 2002 – February 2003 9.0%
March 2003 – November 2011 8.0%
December 2011 – March 2012 8.6%
April 2012 – March 2013 8.8%
April 2013 – March 2016 8.7%
2016–17
Period Interest Rate
April 2016 – September 2016 8.1%
October 2016 – March 2017 8.0%
2017–18
Period Interest Rate
April 2017 – June 2017 7.9%
July 2017 – December 2017[ 7.8%
January 2018 – March 2018 7.6%
2018–19
Period Interest Rate
April 2018 – September 2018 7.6%
October 2018 – March 2019 8.0%
2019–20
Period Interest Rate
April 2019 – June 2019 8.0%
July 2019 – March 2020 7.9%
2020–21
Period Interest Rate
April 2020 – March 2021 7.1%
2021–22
Period Interest Rate
April 2021 – June 2021 7.1%
Duration of scheme
Original duration is 15 years. Thereafter it can either be closed and the entire amount can be withdrawn or on application by the subscriber, it can be extended for 1 or more blocks of 5 years each, with or without making further contributions.

PPF maturity options
Subscriber has 3 options once the maturity period is over.

Complete withdrawal.
Extend the PPF account with no contribution – PPF account can be extended after the completion of 15 years, subscriber doesn’t need to put any amount after the maturity. This is the default option meaning if subscriber doesn’t take any action within one year of his PPF account maturity this option activates automatically. Any amount can be withdrawn from the PPF account if the option of extension with no contribution is chosen. Only restriction is only one withdrawal is permitted in a financial year. Rest of the amount keeps earning interest.
Extend the PPF account with contribution – With this option subscriber can put money in his PPF account after extension. If subscriber wants to choose this option then he needs to submit Form H in the bank where he is having a PPF account within one year from the date of maturity (before the completion of 16 yrs in PPF). With this option subscriber can only withdraw maximum 60% of his PPF amount (amount which was there in the PPF account at the beginning of the extended period) within the entire 5 yrs block. Every year only a single withdrawal is permitted.
Loans
Loan facility available from 3rd financial year up to 6th financial year. The rate of interest charged on loan taken by the subscriber of a PPF account on or after 12 December 2019 shall be 1% more than the prevailing interest on PPF.

Public Provident Fund Scheme, 2019 has reduced the interest spread to 1 (one) percent form earlier spread of 2 percent.

Up to a maximum of 25 percent of the balance at the end of the 2nd immediately preceding year would be allowed as loan. Such withdrawals are to be repaid within 36 months.

A second loan could be availed as long as you are within the 3rd and before the 6th year, and only if the first one is fully repaid. Also note that once you become eligible for withdrawals, no loans would be permitted. Inactive accounts or discontinued accounts are not eligible for loan.

Features
The public provident fund is established by the central government. One can voluntarily open an account with any nationalized bank, selected authorized private bank or post office. The account can be opened in the name of individuals including minor.

The minimum amount is ₹500 which can be deposited.
The rate of interest at present is 7.1% per annum (as of April 2020).
Interest received is tax free.
The entire balance can be withdrawn on maturity.
The maximum amount which can be deposited every year is ₹150,000 in an account at present.
The interest earned on the PPF subscription is compounded annually.
All the balance that accumulates over time is exempted from wealth tax.