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Public Provident Fund [PPF].

PPF investment

Public Provident Fund [ PPF ]

Understanding PPF [ Public Provident Fund ] Investment and It’s Interest Rates

Public Provident Fund ( PPF )

PPF is a good option to invest your money and avail several benefits on it Key to wealth accumulation lies in regular practice of savings and to do it systematically.

Public Provident fund (PPF) is one such long term savings cum tax savings investment scheme which benefits investors of all kinds. It is a perfect retirement planning scheme for those who don’t have any structured retirement pension plans for them. It is a safe investment option due to it being backed by Government, provides tax benefits, has a low initial deposit and provides loan options to investors.

Features / Advantages of post office monthly income scheme

  • Minimum amount required to open PPF account is rupees 100
  • A minimum amount of Rs 500 has to be deposited in each financial year for continuity of account.
  • Maximum limit of PPF investment deposit is fixed at Rs 100000 ( One lakh ) which can either be deposited in a lump sum or in not more than 12 installments.
  • Interest on deposited amount is calculated at 8.7% per annum which is compounded annually.
  • A PPF account can be opened at any of the nationalized bank of India and General Post Offices
  • Deposits in a PPF account provide multiple tax benefits to its account holder under section 80c.

You will only be allowed to withdraw the whole amount only after its maturity. However, you can start to withdraw some amount on the 7th year onwards with certain regulations.

A prominent feature of a PPF account is that you can take a loan on your deposits from third year onwards with certain stipulations. You can also opt to extend your PPF account after its maturity period of 15 years for a block of five years or more.

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