If you want to invest somewhere you can get more returns than FD and your money is also safe, then you can invest in Public Provident Fund (PPF). At present, 7.1% annual interest is being given under this scheme. Apart from this, you also get tax benefits from investing in it. Today we are telling you about the PPF scheme so that you too can earn more profit by investing in it.
However, money cannot be withdrawn from this account for 5 years after the year of opening the PPF account. After the completion of this period, money can be withdrawn by filing Form 2. However, if you withdraw money before 15 years, 1% will be deducted from your fund.
PPF account matures in 15 years, however, the tenure can be extended for 5-5 years within one year of maturity. For this, it has to be extended one year before the completion of maturity. That is, you can invest in this scheme for a total of 25 years. You can withdraw your money after 15, 20, or 25 years. You can invest in it for any number of years.
PPF comes under the category of EEE. That is, you get the benefit of tax exemption on the entire investment made in the scheme. Also, no tax has to be paid on the interest earned and the entire amount of investment in this scheme. The rate of interest earned on PPF investment varies every three months. The PPF account cannot be confiscated by any court or order at the time of debt or other liability.
You can also take a loan against the deposit in the PPF account. You are entitled to take a loan from PPF from one financial year after the end of the financial year in which you have opened the PPF account till the end of the fifth financial year. If you have opened a PPF account in January 2017, then you can take a loan from 1st April 2018 to 31st March 2022. You can take a loan of up to 25% on the deposit.
The minimum amount required to open a PPF account is Rs 500. A minimum deposit of Rs 500 needs to be made in a financial year, while the maximum investment limit has been fixed at Rs 1.5 lakh per annum.
Any person can open this account in his own name in any post office or bank. Apart from this, this account can also be opened by any other person on behalf of the minor. After the minor child attains the age of 18 years, an application has to be made to raise the account status from minor to major. After this, the child who has become an adult can handle his own account.
A PPF account can be opened in a post office or bank by any other person in his own name or on behalf of a minor. However, as per the rules, a PPF account cannot be opened in the name of a Hindu Undivided Family (HUF).
If your PPF account becomes inactive, then to get it started again, you will have to give a written application to the bank or post office where it is open. After this, you will have to give an application to the bank or post office to start your account. For this, you will have to pay a minimum annual contribution of Rs 500 along with a penalty of Rs 50.
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