PPF (Public Provident Fund)

PPF (Public Provident Fund)

  • PPF can be opened at Post Offices or Nationalized Banks.
  • Has mandatory locking of 15 Years and can be extended further 5 years at a time
  • Maximum Investment Allowed: Rs 1.5 Lakh per Year (Budget 2014 increased this limit )
  • Minimum Investment of Rs 500 required every year to keep the account active
  • Interest Rates paid on PPF are market linked onward hence would vary every quarter The interest rate is 7.6% w.e.f 1.1.2018

Advantages

  • The interest earned on PPF is Tax Free
  • After opening the PPF account, investment can be done online every Year
  • Can take loan against PPF and also do partial withdrawal
  • It cannot be attached by court orders
  • Highest Safety – backed by Govt.

Disadvantages

  • Longer Locking period
  • The PPF interest rates are market linked and hence would change every year
  • HUFs and NRIs cannot open PPF Account

Tips

  • Investment done till 5th of the month earns interest for the month. So deposit your money before 5th of month
  • PPF can be opened on minors name with either parents as guardian
  • The total investment in your PPF and the minor child PPF account (for whom you are guardian) should not exceed Rs 1.5 lakh in a financial year
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