Public Provident Fund (PPF) – All about PPF Account, Benefits & Features

Do you want to know about PPF Scheme before opening an Account? Then from this page, you can easily get the Public Provident Fund Account details. Also, you can check all details about PPF Benefits and Key Features. So, know more information about the Public Provident Fund from below sections. Therefore it is very useful while opening a PPF Account.

What is PPF?

PPF is a saving cum tax deduction account in India. It was introduced in the year 1968 by the Ministry of Finance in India. The public provident Fund Account is a long-term investment plan on which regular interest paid. Today the PPF has become one of the best tax savings scheme account. PPF has started by the government to provide retirement security to the self- employed individuals as per provident fund. As PPF is a tax deduction account, you will receive more amount when compared with the amount returns offered by the banks on fixed deposits. The PPF maturity period is 15 years then on your further interest, you can extend this 15 years to 5 years or more than five.

Who are Eligible to open PPF Scheme Account?

The Eligibility conditions to open PPF Account is available here. So, one should check these conditions before opening Account.

  • The people who are residents of India only should open the PPF Account.
  • Only one PPF account is for one person and also the people whose age is 18 years or more can apply for Public Provident Fund Account. There is no upper age limit.
  • The minors have a chance to open PPF Account. But on behalf of them, the parents should open PPF Scheme Account. Hence in the case of parents having two children, then they can open four PPF Accounts i.e. two for them and two for the children under the guardianship of either of the Parent.

Who are not eligible to open Public Provident Fund Account ?

The people should check some conditions to have a PPF Account. Therefore we have listed some conditions below:

  • The individuals who are non-residents can not open PPF Account. But if anyone opened a PPF Account while he/she is residents of India, and when unexpectedly becomes an NRI then they are allowed to continue investing in their accounts.
  • If the person becomes Non-Resident during the period of Public Provident Fund Account, then they can keep investing money in their accessing account. But for these type of Accounts, you are not allowed to extend PPF Account after the maturity period of 15 years.
  • The two persons can not open one account. A person can open an account for himself and another for their children. After his/her death there is no facility to their children to make any additional payments.

Public Provident Fund Key Features

The main Public Provident Fund Key Features listed or provided below.

  • Interests Rate of PPF: The central government announces Interests Rates regularly, annually. Public Provident Fund Interest Rates are compounded yearly. The PPF Interest Rate has fixed at 8.10 from April 01 2016.
  • PPF Tenure Period: The period of PPF Account is 15 years. After 15 years the maturity of Public Provident Fund completed by the end of the year. Also, you can extend this 15 years period to any no. of times for a block of 5 years.
  • Public Provident Fund Initial Investments: The initial amount to open PPF Account is Rs.100/-.
  • Annual Deposit Amount: You should deposit a minimum of Rs. 500/- to the maximum of Rs. 1.5 lakhs per year.
  • Deposit Frequency: To keep the Account active you should deposit money every year to till last year i.e 15th year.
  • PPF Deposit Modes: The Public Provident Fund amount can deposit by various ways such as by cheque, card, through online, Demand Draft. You can make payment by 12 instalments or as a one-time deposit.
  • PPF Withdraw Amount: The PPF Withdraw facility will be available from the 7th financial year. But before the 7th year, you can not withdraw any money.
  • Tax Benefits: The interest are Tax-Free, and the deposited amount is tax deductible under the act of 80C of the Income Tax Act.
  • Nomination: The Nominations will allow on opening the Account or after.
  • Funds Transfer: The Funds are not able to transfer between people and can be easily transferred between bank and post offices for free.
  • Loan Facility: There is a loan facility by the PPF Account from the 3rd financial period to the 6th year.
  • Extension of PPF Account: The renewal or extension of PPF Account is there for every block of 5 years.
  • Joint Accounts: The joint accounts are not allowed under the PPF Scheme.

Benefits of Public Provident Fund

Some of the benefits of PPF (Public Provident Fund) Account are mentioned below.

  • Attractive Long-term investments: With the deposit period of 15 years and lock in period of 7 years the accounts serve as long-term investment goals. By the interest rates which are compounded annually, the effective returns will be more when compared to the returns of bank’s fixed deposit.
  • Beneficial for Retirement Planning: By the long tenures, compounded, capital Protection, tax-free returns makes a good option for building a retirement corpus.
  • Tax-free Returns: The PPF is a Tax deductible account. So, you can withdraw the amount which is tax-free.
  • Low-Risk: Because of the government -backed, there is a low risk of default.
  • Easily Accessible: PPF Account can be opened in any nationalised or public banks. So, you can access the PPF Scheme account online also.
  • No attachment: PPF or Public Provident Funds can not come under court order or laid claim to by creditors.

Therefore, check all the details about Public Provident Fund Account before opening the Account. Also know the key points, features, eligibility conditions for the PPF Account. Before opening the PPF Account, it is better to calculate the Withdrawn Amount, Loan Amount, etc. for the amount you want to deposit. For PPF Calculation, use the PPF Calculator provided below. For more details visit our site regularly.

Public Provident Fund Calculator
Updated: February 27, 2017 — 10:24 am

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