PPF Limit

The Public Provident Fund (PPF) is a statutory small savings scheme for the general public. The scheme was introduced by the Government of India under the PPF Act, 1968. Today, the PPF account is a popular saving scheme for individuals looking to earn guaranteed returns on their investments. Moreover, the PPF scheme is an EEE scheme wherein the investments made, returns earned and even the redemption amount enjoy tax benefits. This tax-saving nature and guaranteed returns offered make the PPF scheme popular.

If you want to invest in the PPF scheme, you can open an account in a bank or a post office. To open an account, however, you should know the PPF deposit limit as well as the withdrawal limits of the scheme. So, let’s have a look at the PPF limits in details –

PPF Account deposit limit

You can open a PPF Account with a minimum deposit of Rs.100. Once opened, you would have to keep on depositing at least once in a financial year in the PPF account till the account matures. A minimum deposit of Rs.500 should be made in one financial year. The PPF Account has a tenure of 15 years which can be further extended by another 5 years. During these 15 years, you would have to make at least one deposit of a minimum amount of Rs.500 to keep the account active.

While the minimum deposit is Rs.500, the PPF maximum deposit limit is Rs.1.5 lakhs in one financial year, i.e. between April and March. You cannot deposit more than Rs.1.5 lakhs in the PPF Account in any given financial year. The deposit frequency, however, is not limited. Earlier, the PPF account max deposit was twelve times in one financial year. However, the Government changed this rule in 2019. Now, you can deposit any number of times in one financial year. These multiple deposits can start from as low as Rs.50. So, while you can make deposits unlimited number of times, the aggregate value of such deposits should not exceed Rs.1.5 lakhs which is the PPF maximum deposit limit.

If you extend the PPF tenure beyond 15 years, you can do so by submitting a request with the bank or post office within a year to maturity of the scheme. If the deposit tenure is extended, you would have to keep making the minimum deposit of Rs.500 every year to keep the account active. Moreover, during the extended duration of the scheme, the PPF account deposit limit would not change. A maximum deposit of Rs.1.5 lakhs per year would be allowed even during the extended deposit tenure.

Alternatively, you can choose not to extend the maturity duration of the scheme but remain invested in it even after maturity. If you do so, you would not have to make any deposits. The PPF account would continue earning interest on the accumulated balance.

Withdrawal Limit from the PPF account

PPF is a long term saving scheme. If you need funds within the tenure of the deposit, you have the following alternatives –

• Between the third and the sixth year of opening the PPF account, you can avail a loan against the account balance. This loan is available for tenure of 36 months and carries an interest rate. The rate of interest on the loan is calculated @1% higher than the applicable rate of interest offered by the PPF scheme. The loan amount which you can avail would  be limited to up to 25% of the account balance in the second year or the year immediately preceding the year in which you apply for the loan
• You can withdraw from the PPF balance partially. These partial withdrawals are allowed from the seventh year of opening the PPF account. Moreover, the withdrawal would be allowed only for specific reasons. The PPF withdrawal limit is 50% of the balance in the PPF account at the end of the 4th year. Partial withdrawals would be allowed once every financial year provided you adhere to the PPF withdrawal limit. To withdraw from the PPF account, you would have to fill up and submit Form C
• If your residency status changes, you can close the PPF account prematurely and avail the balance. This is because PPF accounts can be opened only by Indian residents. So, if your residency status changes, you would no longer be eligible to keep the PPF account and the account would be closed. For such premature closure, you would have to submit a copy of your passport and Visa or your income tax return which shows the proof of change of residency 

PPF Applicability Limit

• PPF accounts can only be opened by Indian residents. NRIs may continue to contribute to PPF accounts established while they were resident Indians. They cannot, however, open new PPF accounts or extend existing PPF accounts after the stipulated maturity period of 15 years.

PPF Limit for Loans

• The maximum PPF loan limit is 25% of the amount at the end of the second fiscal year preceding the year in which the loan was requested.
• The interest rate for loans taken against the PPF account is 2% greater than the interest rate on the PPF account. 
• The interest on a PPF loan is not paid along with the principal, as is the case with traditional loan EMIs.
• After the principal is entirely repaid, the interest must be reimbursed within two months.
• If the loan is not repaid within 36 months, interest at 6% above the PPF account’s current interest rate is applied.
• Only when the first loan has been paid off may a second loan be secured.

Deposit Limit

A PPF account requires a minimum contribution of Rs. 500 and a maximum contribution of Rs. 1.5 lakhs. This indicates that you cannot invest more than Rs. 1.5 lakhs in a PPF account per year. The contribution can be made at any time of year and in any amount. The maximum number of contributions permitted in a calendar year is 12.

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