Public Provident Fund is the schemes started by the central government from 1968 for the welfare of the people of India. As this scheme was launched for the benefit of people who made investment by very small amount and they will get more amount at the maturity. Since this scheme was backed by Central government, there is no risk of loss of money & returns are guaranteed.
PPF is a long term investment having the maturity period of 15 of years from the date of opening the account. We can withdraw partial amount after 5 years from the date of opening the account in case of necessities.
Interest on PPF balance is calculated every month and the amount is credited to the PPF account at the end of every financial year. PPF investors are advised to make contributions to their PPF account before the 5th of each month. Interest is calculated from the 5th of that month till the end of that month on the lowest PPF balance amount. Hence it is always advisable to start PPF account at the start of financial year.
If money has not been invested in PPF account in any year then PPF account may be deactivated from that year. To reactivate your PPF account we have to pay penalty of Rs 50 per year till the year of activation of account.
We can open PPF account either in post office or in authorised banks only. Now a day we can open PPF account by online banking also.