PPF Limit - PPF Account Deposit Limit for Deposits and Withdrawals

Building a long-term savings cushion doesn’t have to be complicated. The Public Provident Fund (PPF) is one of the most widely used government-backed savings schemes in India thanks to its tax perks, safety and flexibility. A key part of using a PPF smartly is understanding the deposit limits and the rules around withdrawals.

• What is the PPF deposit limit (minimum and maximum)
• How often, and how you can deposit
• What you need to know about withdrawals and premature closure
• Why the limits matter, and tips to use them well

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What are the Deposit Limits for PPF?

Minimum deposit

To keep your PPF account active and earning interest you must deposit at least ₹ 500 in a financial year.Some banks mention you can open the account with a smaller amount (like ₹100) but to ensure the account remains valid and interest accrues you must hit the ₹500 minimum each year.

Maximum deposit

The maximum amount you can deposit in your PPF account (own account + minor(s) account where you are guardian) is ₹ 1,50,000 in a financial year.

Important:

• That ₹ 1.5 lakh cap is for one financial year (April 1 to March 31).
• It’s a combined cap across all PPF accounts you hold (you can have one account in your name, and you can open one for a minor you are guardian of, but the total deposit across both must not exceed ₹ 1,50,000).
• Any amount you deposit beyond ₹ 1.5 lakh in that year will not earn interest and will not qualify for tax deduction under Section 80C.

Deposit frequency and mode

• You can deposit the allowed amount in one lump sum or in multiple installments during the year.
• The number of installments per financial year is typically up to 12.
• Deposits can be made at your bank or designated post office branch, or via online/branch modes where available.

Why these limits?

• The minimum ensures your account remains valid and earns interest without it, your account may be treated as “inoperative”.
• The maximum serves to standardise the benefit and ensure PPF remains a long-term savings tool rather than ultra-large deposits for tax arbitrage.

What Happens If You Don’t Follow the Limits?

If you deposit less than ₹ 500 in a year

If you fail to deposit at least the minimum (₹ 500) in a financial year:

• The account is treated as discontinued/inoperative for that year. You will not be able to take a loan from it or make withdrawals until revived.
• You can revive the account by paying the minimum deposit plus a small penalty (often ₹ 50 per default year) while the account is still within its original 15-year term.

If you deposit more than ₹ 1.5 lakh in a year

• The excess amount above ₹ 1.5 lakh will not earn interest.
• That excess also won’t be eligible for deduction under Section 80C for that year.
• The authorities may reclaim interest credited on the excess amount.

Withdrawal & Closure Rules - What You Should Know

While the deposit limit is central, PPF also has rules about when you can access your money:

Maturity & extension

• The PPF account matures after 15 years from the end of the year in which it was opened.
• After maturity, you can choose to extend the account in blocks of 5 years each (with or without making further contributions).

Partial withdrawal

• Partial withdrawals are permitted from the 7th financial year onwards (i.e., after six full years of the account) under certain conditions.
• The maximum you can withdraw is capped (for example up to 50% of the balance at the end of the 4th year preceding the year of withdrawal or at the end of the previous year, whichever is lower).

Loan against PPF

• From 3rd financial year to 6th financial year, you can take a loan against your PPF account.
• The maximum is 25% of the balance at the end of the 2nd year before the year in which loan is applied.

Premature closure

• Generally, PPF does not allow full withdrawal before maturity. But under specific cases (serious illness of subscriber/guardian/dependent, or higher education of account-holder/dependent) closure may be permitted after 5 years.

Why These Limits Matter & How You Can Make the Most of PPF

Here’s how you should think about the deposit limits to use PPF smartly:

• Use the full ₹ 1.5 lakh limit if you can: Since your contributions qualify for deduction under Section 80C (up to the ₹1.5 lakh cap), depositing the maximum each year leverages tax benefit + compound interest over the long term.
• Consistency is key: Because interest is compounded annually and calculated on the lowest balance between 5th and last day of each month, regular timely deposits help.
• Avoid over-depositing: Depositing above the limit gives no extra benefit—no interest on the excess, no tax deduction. So schedule your deposits carefully.
• Don’t treat PPF like a short-term fund: The maturity period is 15 years. While some flexibility exists (withdrawals/loan), the scheme is meant for long-term savings.
• Plan liquidity separately: Since large withdrawals are restricted, ensure you have other liquid savings if you might need money earlier.
• Use extension wisely: After 15 years, you can extend the account block-wise. If you don’t need the money immediately, extending allows your money to keep earning tax-free interest.
• Keep track of multiple accounts: If you open PPF for yourself and minor(s) you are guardian of, the combined deposit limit (₹1.5 lakh) applies across all accounts in that financial year.

 Example Scenario

Let’s say you open a PPF account at the start of FY 2025-26.

Here’s how you might plan:

• Deposit ₹ 1.5 lakh soon after opening (to maximise compound effect).
• Make sure you also deposit at least ₹ 500 each subsequent year so account remains active.
• After 15 years, account matures. You could then withdraw or extend for 5 more years.
• Suppose you opted for extension: You can keep contributing (up to ₹ 1.5 lakh a year) or just let the balance grow without further deposit.

If instead you deposit only ₹ 30,000 each year, you’ll still build a corpus, but slower. The key is consistent contribution and staying disciplined.

Final Thoughts

The PPF is an excellent vehicle for long-term savings thanks to its tax-free nature, government backing and disciplined savings framework.

But to use it well, understanding the deposit limits is essential:

• Deposit at least ₹ 500 every year to keep the account active
• Maximise your contribution up to ₹ 1.5 lakh each financial year if you’re able and using it for tax planning/savings
• Don’t worry about putting everything in at once you can make multiple deposits, but just be aware of the cap
• Plan withdrawals and extensions with long-term horizon in mind

By being aware of the deposit and withdrawal rules, you’ll be better positioned to make the PPF serve your financial goals, whether retirement, building a corpus for the future, or simply maintaining a safe, tax-efficient savings vehicle.