The Public Provident Fund is one of the best money-saving tools available to every Indian citizen. What helps money grow is the high PPF interest rate of 7.10%. It ensures a massive wealth accumulation over a period of time because of, not just the high-interest rate, but also because of the benefits of compounding. Here we provide all the basic information that an investor needs.
Check out the Public Provident Fund in 10 points.
a) Minimum PPF deposit is Rs 500 and the Maximum PPF deposit is Rs 1,50,000 in a fiscal (April to March).
b) PPF loan facility is available, but not from the beginning as there is a 15 year lockin period.
c) However, account holders should note that PPF withdrawal is permissible from 6th financial year. The entire sum cannot be withdrawn.
d) PPF maturity period is reached on completion of fifteen complete financial years from the end of the year in which the account was opened.
e) Much to the benefit of account holders, after maturity on reaching of 15 years, account can be extended for any number for a block of 5 years with further contributions or without.
f) PPF account can be retained indefinitely without further deposit after maturity. However, the PPF interest rate applicable will be the prevailing. PPF interest rate is subject to change every year.
g) Most importantly, according to PPF rules, the amount in the account is not subject to attachment under any order or decree of a court of law.
h) PPF income tax benefits are there too. Deductions under Sec.80-C of Income-Tax Act are allowed for as much as Rs 1.5 lakh every year.
i) Yes, much to the benefit of the account holder, PPF interest is free from Income Tax under Section-10 of Income-Tax Act.
j) Premature PPF account closure is possible, but only after a period of 5 years. The reason can be education and medical purposes. The etire amount can be withdrawn.
Notably, PPF interest rate, along with the magic of compounding can give investors a massive retirement amount that can be used for buying a house, or even for ensuring long-term flow of retirement income every month.
Public Provident Fund account is one of the most important money-making tools for an individual. PPF can provide a huge sum of money on retirement. Check out the Public Provident Fund account in 10 points. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
