PUBLIC PROVIDENT FUND (PPF)- A LONG TERM SAVING INSTRUMENT

Public Provident Fund is a popular scheme for individuals who want to earn high and get stable returns. PPF Account is a long term saving instrument which is provided by Central Government.The greatest thing about PPF is Exempt-Exempt-Exempt status.

PPF investment gives assured returns and provides old age people an income security.By investing in P.P.F Account you can see the power of compounding for a longer term/period.

Benefits of PPF:

• Risk free, guaranteed returns
• Multiple PPF tax benefits
• Small savings, greater returns
• Liquidity with partial withdrawal
• Flexibility of Tenure
• Low Risk
• Easy Accessibility

Applicability:

• Any person who is a resident and is above the age of 18 years age.
• A minor can apply through Guardian.

Non-Applicability:

• Non-Resident
• HUF
• Foreigner

Investment Criteria:

Minimum of Rs.500 p.a and Maximum of Rs. 1,50,000 (There is no limit on number of deposits in the account)

Tenure Period:

A period of 15 years, after the completion of 15 years the account can be extended to 5 years.

Documents required:

• Identity Proof
• Address proof
• Passport size photographs
• A account opening form

Opening an Account Procedure:

• PPF account can be opened at any Nationalised Bank and Post Office.
• Submit Form 1 along with relevant documents
• Only one account can be opened or created at the name of an individual or minor of whom is a guardian of.

Extension of PPF Account:

The account holder may continue to extend the period even after 15 years. The extension can be taken in blocks of 5 years and can be continued with or without deposit. The extension can be done within 1 year of maturity date of account opening.

Withdrawal:

• 50% of the withdrawal can be made at any time after 5 years from the end of the year the account was opened.
• This facility is available once in a year.
• If any loan taken against PPF, then it have to be repaid before the request of withdrawal.

Loan against PPF:

• The account holder may apply for loan against P.P.F account.
• Loan can be applied between 3rd – 6th financial year of account opening with interest @1%.
• Penal interest of 6% p.a. shall be charged.
• Loans can be repaid in installments or lump sum.