The students who has just passed out of their college and joined the corporate world and earning lots of money,after sometime they start to make plan how to get great returns of their money and where to invest so they start to investigate the best ways to invest their hard earned money.At one point in time or the other we would have come across ‘PPF” or ‘Public Provident Fund’ as an effective investing instrument.There are lots of other offerings available in the market one of them is the PPF or Public Provident Fund so here we will help people to know more about PPF and it’s benefit.
So, the first question always arises in our minds that:
What is PPF?
The PPF or Public Provident Fund has been established by the central government. Any individual can open PPF account be it a salaried person, business man, consultant, freelancer or even working in contractual basis. NRI’s are not allowed to open PPF account but while he is a residnet of India and subsequently become NRI then the individual can continue PPF account.
PPF is a Long Term Debt Scheme of the Central Government of India on which regular interest is paid. PPF account can be opened in any of the Post Offices, any branch of State Bank of India and some branches of nationalised banks.
Benefit’s of PPF Account?
Currently, the interest rate offered through PPF is around 8.6 per cent, which is compounded annually, which is decided by Govt.
1) Benefit u/s 80c – Investments made in PPF account are eligible for deduction u/s 80c
2) Tax Free Interest – No tax is payable in the interest earned on PPF account
Interest is calculated on the lowest balance between the fifth day and last day of the calendar month and is credited to the account on March 31 every year. So to derive the maximum, the deposits should be made between 1st and 5th day of the month.
Maximum & Minimum an Individual can deposit in PPF Account?
The maximum amount an individual can invest per year in PPF is Rs 1,00,000/- and the minimum amount an individual can invest per year is Rs 500/-
Duration of Investment in PPF?
The duration of the investment is 15 years from the date when the account is opened after 5 years the whole amount can be withdrawn and if someone wants to extend the PPF account, the account holder can also also apply for extension for further 5 years.
Other Faqs about PPF ?
1) Pre-Mature withdrawal for PPF – Yes, it can be done but after the end of the 5th year and the maximum amount an individual can withdraw in pre mature stage is 50% of amount which stood in his/her account
Latest posts by sanjeeb panda (see all)
- How To Spy on Your SEO Competitors and Gain More Traffic ? - November 17, 2015
- Five Financial Traps All Businesses Must Avoid - June 20, 2015
- List of Documents For Getting Home Loans Approved - February 22, 2015