Here are 4 lesser known facts about PPF

PPF account can be opened by a single resident Indian (adult). A guardian on behalf of a minor/ person of unsound mind can also open it. Retired defense employees above 50 years of age and below 60 years of age, subject to the condition that investment to be made within 1 month of receipt of retirement benefits are eligible to open. However, a joint account is not allowed to open.

In PPF, the maturity date is not calculated from the date of the account opening but from the end of the financial year in which the sum of money was deposited. It does not matter which month or day/date the account was opened.

For example, an investor made his/her first contribution on July 1, 2019. The 15-year lock-in period will be calculated from March 31, 2020, and thus the year of maturity or maturity date will be April 1, 2035.

As per the PPF rule, investors should always deposit their installments before or on the fifth of every month. This helps them in gaining interest benefit for that month.

The interest rate offered on PPF accounts is calculated on the minimum balance in the account between the fifth day of the month and the last day of the month.

“The interest on the amount deposited is calculated on a monthly basis in PPF, but the interest is credited into the account at the end of the financial year, which is on March 31 of every year. The interest becomes payable for that month if the deposit is made before the fifth of that month. One can get the maximum amount of interest on interest if the amount is deposited before 5th,” explains Nitin Shahi, Executive Director—Findoc.

The loan can be taken after the expiry of one year from the end of the year in which the initial subscription was made but before the expiry of five years from the end of the year in which the initial subscription was made.

Withdrawal can be taken after the expiry of five years from the end of the year in which the account was opened. An account holder can withdraw prematurely, up to a maximum of 50 percent of the amount that is in the account. Further, withdrawals can be made only once in a financial year.