Can HUF Open A PPF Account? Rules, Benefits And Latest Updates

Backed by the Government of India, the Public Provident Fund (PPF) scheme is among the most popular tax-saving investments as it comes under the Exempt Exempt Exempt (EEE) status. 

This implies that deposits made in PPF, interest earned, and the total maturity amount receive tax exemption under the Income Tax Act. Section 80C exempts deposits up to INR 1.5 lakhs, and Section 10 makes the interest received tax-free¹.

The EEE status, along with a fixed interest of 7.1% as of 01 April 2020 to 30 June 2026, optimises the effective interest earned on PPF. Therefore, several investors choose this investment medium not only for long-term savings but also to optimise tax planning. While the Public Provident Scheme 2019 clearly specifies individuals as eligible beneficiaries, questions arise on the PPF eligibility for HUF.²

The objective of the blog is to closely analyse the question, “Can an HUF open a PPF account?” in detail.

Can An HUF Open A PPF Account

Simply put, under the current regulatory framework of PPF, a Hindu Undivided Family cannot open a PPF. The laws governing the scheme clearly mention only individuals as eligible investors. However, there is a reason why confusion arises regarding the PPF account rules for HUF. Understanding this is necessary to get a nuanced perspective on the subject.

1. Before and After 13 May 2005: The Public Provident Fund Scheme was first introduced in 1968. Initially, before 13 May 2005, not only individuals but also the Hindu Undivided Family and the Association of Persons could open a PPF account. On 13 May 2005, the Ministry of Finance issued a notification numbered GSR 291 (E). According to this, the Hindu Undivided Family and the Association of Persons were no longer eligible to open a PPF account.³

Furthermore, on 25 July 2003, another such notification, numbered GSR 585 (E), clarified that Non-Resident Indians are not eligible to open a PPF account as well. Therefore, the two notifications restricted account eligibility to resident individuals alone and categorised HUF as ineligible for PPF.

2. New Public Provident Fund Scheme 2019: Later, on 12 December 2019, the Public Provident Fund Scheme 2019 was introduced to replace the parent statute passed in 1968. Even under this law, the account holder is defined as an individual. Therefore, despite the 2019 update, an HUF cannot open a PPF account.⁴

Now, a key question arises. Given that HUF became ineligible post the 13 May 2005 notification, what happened to the PPF accounts of HUFs that existed before the date?

What Happens To Existing HUF PPF Accounts

The HUF PPF rules in India clearly specified a trajectory to help smooth transition between the rules before and after 13 May 2005.⁵

According to the guidelines, if a PPF account is opened by an HUF on or after 13 May 2005, that is, after the release of the notification making HUF investment in PPF ineligible, the account will be declared invalid. The account would be closed and the deposit amount credited back to the investor, without any interest. 

On the other hand, if the PPF account for HUF was started before 13 May 2005, the account would continue for 15 years, till maturity, along with withdrawal and interest benefits as per the PPF scheme rules. However, after maturity, the account cannot be extended.

The table below summarises the maturity and extension rules of an HUF PPF account.

In such a scenario, when HUFs cannot invest in a key tax-saving investment medium, let us understand what the alternative HUF investment options are.

Alternatives To PPF For HUF

Besides tax savings, a key feature of PPF that attracts investments is its fixed income. While an HUF cannot invest in PPF, it can choose other fixed-income investments like fixed deposits and debt instruments like bonds.

• Fixed Deposits: Although traditional FDs offered by public and private banks are commonly known, corporate FDs are still a unique asset class. Fixed deposits with greater interest rates than average, offered by Non-Banking Finance Companies (NBFCs) or small finance companies, are called corporate FDs.
• Bonds: A type of debt instrument, bonds offer investors the opportunity to earn fixed income through periodic interest, besides capital gains on liquidation in the secondary market. The precedence of a secondary market also increases the liquidity of this asset.
• Other Debt Instruments: Apart from bonds, an HUF can choose other debt instruments, like debt mutual funds. These mutual funds invest their pool primarily into debt assets, usually offering a more stable growth than equity funds in the short-term.

However, an HUF should choose an asset after comparative research to ensure that the investment aligns with its goals, risk profile, and temperament. Grip offers a curation of credit-rated assets across categories, like corporate FDs, corporate bonds, etc., from varying issuers to help aid research and investment. The table below lists the returns from the popular assets on Grip, as of 15 April 2026.

However, despite fixed income, tax efficiency remains a key concern among HUF investors, given that they can no longer avail the EEE status of PPF. Let us understand the HUF savings scheme in India.

Many tax-saving investment schemes like the Public Provident Fund, National Savings Certificate, etc., mostly cater to individuals, and the Hindu Undivided Family cannot avail these schemes as they are a separate entity.⁶ However, the Income Tax provisions like 80C, 80D, and so on apply to HUF as well⁷. Therefore, while some schemes are restricted to individuals, others, like tax-saving FDs, are not. Therefore, optimal curation of a portfolio with HUF tax-saving investments, based on the applicable IT Act deduction provisions, can aid tax planning.

Conclusion

While the Public Provident Fund continues to be one of India’s most recognised long term tax saving instruments, the current rules make it clear that a Hindu Undivided Family cannot open a new PPF account. Only resident individuals are eligible to invest, and the restriction introduced in 2005 continues under the updated PPF Scheme 2019.

For HUFs that want to build wealth while managing tax efficiency, the focus now shifts toward selecting other suitable investment avenues such as tax saving fixed deposits, debt mutual funds, corporate FDs, and bonds. The right choice depends on the family’s financial goals, liquidity needs, and risk appetite.

For investors exploring fixed income opportunities beyond traditional options, platforms like Grip can help compare curated corporate bonds and high yield fixed income products that may align with an HUF’s long term investment strategy.

FAQs On Can HUF Open A PPF Account

Author: Grip Invest Editorial Team The Grip Invest Editorial Team is a group of Chartered Accountants, MBA (Finance) graduates, and Qualified Research Analysts dedicated to helping you invest smarter. We dive deep into India's fixed income landscape to deliver content that is accurate, up-to-date, and easy to understand. Whether you're exploring bonds, fixed deposits, or other fixed income opportunities, our guides cut through the noise and give you the clarity to make better financial decisions.

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