PPF Investment: PPF, or the Public Provident Fund, is a government-supported savings and investment initiative in India. Renowned for its appealing interest rates, tax advantages, and low risk, PPF stands as one of the most favoured investment avenues in the country. Individuals, whether in their own name or acting on behalf of a minor or a person of unsound mind, are eligible to initiate a PPF account.
Parents have the option to open a PPF account for their minor children, making it a prudent strategy for kickstarting savings towards their future. The PPF account, distinguished by its competitive interest rates and tax perks, emerges as a noteworthy investment avenue tailored for securing the financial well-being of children.
Here Are 5 Key Facts About PPF (Public Provident Fund) Investment:
Long-term savings with attractive interest rates: PPF is a long-term savings scheme with a lock-in period of 15 years. This means that you cannot withdraw your money before the completion of 15 years. However, PPF offers attractive interest rates, which are currently set at 7.10% per annum. This makes PPF a good option for long-term investment goals, such as retirement planning or children’s education.
Tax benefits under Section 80C: PPF investments are eligible for tax deductions under Section 80C of the Income Tax Act. This means that you can deduct up to Rs. 1.5 lakh per year from your taxable income for investments made in PPF. This can significantly reduce your tax liability.
Tax-free returns: The interest earned on PPF investments is completely tax-free. This means that you do not have to pay any tax on the interest earned, regardless of the amount. This makes PPF a very attractive investment option for those in higher tax brackets.
Partial withdrawals and loans: PPF allows partial withdrawals from the 7th year onwards, subject to certain conditions. You can also take a loan against your PPF balance from the 3rd to the 6th year onwards. This can be helpful in meeting any unexpected financial needs.
Government-backed scheme: PPF is a government-backed scheme, which means that your investments are safe and secure. The interest rates are also reviewed and adjusted by the government on a quarterly basis, ensuring that you receive competitive returns.
PPF Account: Other Features
- Original duration is 15 years. Thereafter, on application by the subscriber, it can be extended for 1 or more blocks of 5 years each.
- The rate of interest is determined by the central government on a quarterly basis. At present it’s 7.10% per annum.
- Loans and withdrawals are permitted depending upon the age of the account and balances as on the specified dates.
- Nomination facility is available in the name of one or more persons. The shares of nominees may also be defined by the subscriber.
- The account can be transferred to other branches/ other banks or Post Offices and vice versa upon request by the subscriber.
How To Open A PPF Account?
PPF accounts can be opened at any designated branch of any authorised bank or post office. To open a PPF account, you will need to fill out an account opening form and submit the required documents, such as your ID proof, address proof.
Once you have opened a PPF account, you can make contributions to it at any time during the financial year. You can make contributions online, through NEFT/RTGS, or in cash at the bank or post office.
