SBI PPF Scheme : Are you looking for a safe and rewarding long-term investment option? The SBI Public Provident Fund (PPF) Scheme is one of India’s most trusted and tax-saving instruments. With just ₹1.2 lakh invested annually, you can potentially build a corpus of over ₹32 lakhs. It’s a government-backed scheme, offering guaranteed returns, tax benefits, and long-term financial security.
Let’s dive deep into how the SBI PPF works, the benefits it offers, and how you can turn disciplined savings into substantial wealth over 15 years.
What is the SBI PPF Scheme?
The State Bank of India’s Public Provident Fund (PPF) is a long-term savings scheme launched by the Government of India. It is ideal for investors who seek stable, risk-free returns and want to save tax under Section 80C of the Income Tax Act.
Key Features:
- Backed by the Government of India – 100% safe
- Fixed interest rate (currently 7.1% p.a., compounded annually)
- Lock-in period of 15 years (with extension options)
- Tax deduction under Section 80C up to ₹1.5 lakh per annum
- Entire maturity amount is tax-free
How ₹1.2 Lakh Per Year Can Grow to ₹32 Lakhs
If you invest ₹1.2 lakh every year (₹10,000 per month), the power of compound interest can help you build a massive corpus over 15 years. The interest is compounded annually, which significantly increases the final amount.
Here’s a detailed look at how your investment grows:
PPF Growth Projection Table (15-Year Term)
| Year | Yearly Investment (₹) | Cumulative Investment (₹) | Interest Earned (₹) | Total Balance (₹) |
|---|---|---|---|---|
| 1 | 1,20,000 | 1,20,000 | 4,260 | 1,24,260 |
| 2 | 1,20,000 | 2,40,000 | 13,081 | 2,57,341 |
| 3 | 1,20,000 | 3,60,000 | 22,268 | 3,99,609 |
| 4 | 1,20,000 | 4,80,000 | 31,831 | 5,51,440 |
| 5 | 1,20,000 | 6,00,000 | 41,782 | 7,13,222 |
| 10 | 1,20,000 | 12,00,000 | 1,35,583 | 14,95,583 |
| 15 | 1,20,000 | 18,00,000 | 13,97,596 | 31,97,596 |
Note: The interest rate is assumed to remain constant at 7.1% p.a. Actual returns may vary if rates change.
As seen above, your total investment over 15 years will be ₹18,00,000. Thanks to the power of compounding, your maturity amount will be nearly ₹32 lakhs — entirely tax-free!
SBI PPF Scheme Benefits You Can’t Ignore
1. Guaranteed Returns and Safety
Since it is a government-backed scheme, your principal and interest are completely safe. It is not linked to market performance, making it ideal for risk-averse investors.
2. Tax Benefits
- Investment up to ₹1.5 lakh annually is tax-deductible under Section 80C
- Interest earned is tax-free
- Maturity amount is exempt from tax
3. Flexible Investment Options
- Minimum annual deposit: ₹500
- Maximum annual deposit: ₹1.5 lakh
- You can invest in lump sum or in a maximum of 12 monthly installments
4. Partial Withdrawals and Loan Facility
- Partial withdrawals allowed after the 6th financial year
- Loans can be taken from the 3rd to the 6th year
Investment Strategy: Monthly vs Annual Contribution
You can choose to invest either monthly or once annually. Here’s a quick comparison:
Monthly vs Annual Investment Table
| Mode of Investment | Monthly Amount (₹) | Yearly Amount (₹) | 15-Year Corpus (₹) |
|---|---|---|---|
| Monthly | 10,000 | 1,20,000 | ₹31.97 lakhs |
| Annual (Lump Sum) | — | 1,20,000 | ₹31.44 lakhs |
Note: Monthly contributions earn more interest as the money is deposited earlier and compounded sooner.
Who Should Invest in SBI PPF?
The PPF scheme is ideal for:
- Salaried individuals seeking tax-saving options
- Self-employed individuals wanting secure retirement planning
- Parents saving for their children’s future
- Anyone looking for a long-term, risk-free investment
Key Rules and Guidelines of the SBI PPF Account
| Criteria | Details |
|---|---|
| Account Tenure | 15 years (can be extended in 5-year blocks) |
| Minimum Deposit | ₹500/year |
| Maximum Deposit | ₹1.5 lakh/year |
| Lock-in Period | 15 years |
| Partial Withdrawals | Allowed after 6 years |
| Loan Facility | Available from 3rd to 6th year |
| Interest Rate | 7.1% p.a. (subject to quarterly revision) |
| Compounding Frequency | Annual |
| Tax on Maturity | Fully tax-free |
How to Open an SBI PPF Account
Opening a PPF account with SBI is simple and can be done online or offline.
Online Method:
- Log in to SBI Net Banking
- Go to “Request & Enquiries” → “New PPF Account”
- Fill in your details and submit
- A PPF account will be opened instantly
Offline Method:
- Visit your nearest SBI branch
- Fill out the PPF Account Opening Form
- Submit KYC documents and passport-size photo
- Deposit the first installment (minimum ₹500)
Extend Your Investment Beyond 15 Years
After the initial 15-year term, you can extend your PPF account in blocks of 5 years, with or without further contributions. This allows your money to grow even further without any tax liability.
Is the SBI PPF Scheme Right for You?
If you’re looking for a safe, long-term investment with guaranteed returns and tax benefits, the SBI PPF Scheme is a top choice. With disciplined investing of ₹1.2 lakh annually, you can build a robust corpus of over ₹32 lakhs over 15 years — completely tax-free.
Whether your goal is retirement, children’s education, or a safety net for the future, PPF offers unmatched security and peace of mind.
This article is for informational purposes only and does not constitute financial advice. Interest rates are subject to change as per government notifications. Always consult a certified financial advisor before making any investment decisions.
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How does the SBI PPF scheme offer a significant return on investment?
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By depositing ₹1,20,000, you could get a ₹32 lakh return.
Now my age is 63 years & if I open a PPF A/c for 15 years, unfortunately die before maturity & payment of PPF contributions will not be paid, what this a/c status will be so far payment of Contributions & refund of accumulated amount is concerned
Nomination facility is available. Simple.
Can we have two different PPF accounts in two different banks
No
Need to confirm from bank
As employees, whose annual income is 12.75 lakh are exempted from Income tax and In the New Regime of IT, No investment is accepted to claim and further the Interest rate in this scheme is very low (7.1%)…. the scheme is not useful.
Not really. Investment is smart when one chooses various baskets. PPF is one certain return, w/o tan on the interest earned. It’s wise invest atleast 20% of one’s income.
Even FD gives more. Also mutual fund gives minimum 9%
Dear sir/mam,
This is a absolutelt excellent scheme but the rate of interest is very low when compared to FD.
If possible pls increase the interest rates.
From when did Post offfice PPF scheme became SBI PPF scheme.
Whether NRI can apply?
However by investing in Equities or in any mutual funds will earn 3 times of the above figure with the same investment. Ever thought what banks do with people’s money. They take their money & invest in equity & earn 3-4 times & in return give only 1-1.25 times only.