Want to open a Public Provident Fund account? Here's how it works

Public Provident Fund (PPF) is a long-term scheme that allows individuals to both save and invest at the same time. Aimed primarily at the working middle-class population, the accounts under the scheme are tax-free, accessible and simple.

Finance ministry’s National Savings Institute offered PPF account for the public for the first time in the country in 1968. The scheme has a lock-in period of 15 years and can be extended by five years at a time. An individual can invest in a PPF scheme either through a bank or a post office.

An individual can invest from Rs 500 to Rs 1,50,000 in a fiscal year to their PPF account. The contributions can either be made on a yearly basis or in monthly instalments. The rate of interest is calculated on the minimum balance in the PPF account between the fifth and the last day of every month, which makes it compulsory for the individual to invest before the fifth of every month.