Public Provident Fund (PPF) Alert: Deposits Above ₹1.5 Lakh May Earn Zero Interest - Know Account Rules and Penalties
The Public Provident Fund (PPF) remains one of India’s most trusted long-term savings schemes. However, this important Public Provident Fund alert deserves attention - any deposit above ₹1.5 lakh in a financial year may earn zero interest. Many investors are unaware of this rule, which can directly impact overall returns.
Here’s what you need to know to avoid losing interest on your hard-earned money.
Why PPF Continues to Be a Preferred Investment Option
The Public Provident Fund is popular because it offers government-backed security, stable returns and tax benefits. Investors not only get deductions under Section 80C, but the interest earned and maturity amount are also tax-free.
With a 15-year lock-in period and the benefit of compounding, PPF is widely used for long-term financial goals such as retirement planning and children’s education.
Despite these advantages, certain rules must be followed strictly.
One Individual, One PPF Account Rule
Under the Public Provident Fund Scheme, 2019, an individual is allowed to operate only one PPF account in their own name. It does not matter whether the account is opened in a private bank, public sector bank or post office - holding multiple accounts is not permitted.
While opening a PPF account, applicants must declare that they do not already hold another PPF account. Joint accounts are also not allowed, making it strictly a personal investment scheme.
If more than one account is detected, the additional account is treated as irregular.
PPF Account for Minor Children: Important Limit to Remember
Parents are permitted to open a PPF account on behalf of their minor child. However, only one parent can operate that account, and both parents cannot open separate accounts for the same child.
Here’s what you need to know to avoid losing interest on your hard-earned money.
Why PPF Continues to Be a Preferred Investment Option
The Public Provident Fund is popular because it offers government-backed security, stable returns and tax benefits. Investors not only get deductions under Section 80C, but the interest earned and maturity amount are also tax-free.
With a 15-year lock-in period and the benefit of compounding, PPF is widely used for long-term financial goals such as retirement planning and children’s education.
Despite these advantages, certain rules must be followed strictly.
One Individual, One PPF Account Rule
Under the Public Provident Fund Scheme, 2019, an individual is allowed to operate only one PPF account in their own name. It does not matter whether the account is opened in a private bank, public sector bank or post office - holding multiple accounts is not permitted.
While opening a PPF account, applicants must declare that they do not already hold another PPF account. Joint accounts are also not allowed, making it strictly a personal investment scheme.
If more than one account is detected, the additional account is treated as irregular.
PPF Account for Minor Children: Important Limit to Remember
Parents are permitted to open a PPF account on behalf of their minor child. However, only one parent can operate that account, and both parents cannot open separate accounts for the same child.
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