The Public Provident Fund (PPF) scheme is a very popular long-term saving Central Government scheme which is framed under the PPF Act of 1968. The Scheme offers combination of tax savings, returns, and safety and an investment avenue with decent returns coupled with income tax benefits. The Public Provident Fund scheme was launched in 1968 by the Finance Ministry’s National Savings Institute with objective to help individuals make small savings and provide returns on the savings. The Public Provident Fund scheme offers an attractive rate of interest and no tax is required to be paid on the returns that are generated from the interest rates.
How To Open A PPF Account:
- Log in to your net banking website.
- Click On the option the option of Open a PPF Account.
- Choose the relevant option between a self account and a minor account.
- Enter the correct required information such as nominee details, bank details.
- Complete the procedure and submit the form.
Official Website: 2023 Public Provident Fund (PPF) Scheme
Read More Details Here: 2023 Public Provident Fund (PPF) Scheme
Scheme Application Forms: 2023 Public Provident Fund (PPF) Scheme
Public Provident Fund (PPF) Scheme 2023 – Loan Against PPF, Open PPF Account Online, Tax Benefits, Interest Rate, Withdrawal, Apply Online
Prior, opening a PPF account was allowed only at Nationalised Banks or private banks such as Axis, HDFC, and ICICI Bank also offer the PPF scheme but now eligible candidates can open a PPF account at banks or at post offices. PPF interest compounded on an annual basis and interest rate has been reduced from 7.9% to 7.1% currently. The PPF interest rate is set by the Finance Ministry on a yearly basis and it will be paid on March 31. In PPF scheme interest calculated on the basis on the minimum balance that is available between the close of the fifth day and the last day of the month.
If you want to open a PPF, you should have a minimum investment of Rs.500 and your maximum investment is Rs.1.5 lakh for every financial year. The minimum tenure of a PPF scheme is 15 years thereafter, on application by the subscriber, can be extended to a block of 5 years. Candidates can open a PPF account with Rs.100 and annual investments over Rs.1.5 lakh will not earn any interest and Individuals can make a deposit into the PPF account via cheque, cash, demand draft, or online fund transfer. Public Provident Fund scheme is risk-free and offers guaranteed returns because backed by the Indian government. Individuals can avail loan against your PPF during the third and sixth year of your contribution and loan amount that you can avail should be 25% of the total amount available in your PPF account.
Public Provident Fund (PPF) Scheme 2023 Details – Eligibility, Important Documents, Importance of PPF, Tax Benefits, Loan against PPF, PPF Scheme Interest Rate, PPF Withdrawal
- Eligibility For PPF Scheme:
- Candidates are a citizen of Indian.
- Candidates can open only one PPF account unless your second PPF account is in the name of a minor.
- HUF And NRIs are Not eligible for PPF Scheme.
- Opening of joint accounts and multiple accounts are not allowed.
- Important Documents to Open a PPF Account:
- PPF account opening form which is also you can obtain from any bank which is authorized to open a PPF account.
- Aadhaar Card, Voter ID card, or Driving License for KYC documents to verification.
- Address Proof.
- PAN Card.
- Passport size photographs.
- Nomination form which can be obtained from any bank which is authorized to open a PPF account.
- Importance of PPF Scheme:
- PPF scheme is considered to be one of the best long-term saving investment tools and is suitable for those with low-risk appetite.
- It can be used as a diversification tool and also offers tax-saving benefits.
- PPF scheme is an investment which comes under the Exempt-Exempt-Exempt (EEE) category.
- Individuals can avail loan against your PPF during the third and sixth year of your contribution.
- Loan against PPF:
- Individuals can avail loan against your PPF during the third and sixth year of your contribution.
- The maximum tenure for which you can avail this loan is for three years in PPF.
- If you completely repay your first loan, then you can take a second loan before the beginning of the sixth year.
- PPF Scheme Interest Rate:
- The PPF interest rate is set by the Finance Ministry on a yearly basis currently, interest rate has been reduced from 7.9% to 7.1% in PPF and it is compounded on an annual basis and paid on March 31.
- The interest calculated on the basis of minimum balance that is available between the close of the fifth day and the last day of the month.
- PPF Withdrawal:
- The minimum tenure of a PPF is 15 years and once your PPF account attains maturity, you can then withdraw the complete maturity amount.
- You can partially withdraw from the seventh year onwards in case you are in immediate requirement of funds, you can make a premature withdrawal of up to 50% of the total amount available in your account at the end of the fourth year.
Tax Benefits in Public Provident Fund Investment:
- Public Provident Fund (PPF) is a very popular long-term saving Central Government scheme of investment which comes under the Exempt-Exempt-Exempt (EEE) category.
- This means that the amount you make in the Public Provident Fund (PPF) will be deductible under Section 80C of the Income Tax Act.
- When you withdraw the money from PPF the amount that you accumulate and the interest will be exempt from tax.
- You cannot close a Public Provident Fund (PPF) account prematurely.
Key Features of PPF Scheme:
- Tenure of the PPF: The minimum tenure of a PPF is 15 years and you can be extended in sets of 5 years.
- Opening Balance: Individual can open a PPF account with Rs.100 and annual investments over Rs.1.5 lakh.
- Investment Limits: For PPF the minimum investment of Rs.500 and your maximum investment is Rs.1.5 lakh for every financial year.
- Deposit Frequency: Deposit has to be made every year, for 15 years to keep the PPF accounts active and the maximum 12 installments in a year.
- Nomination: When you open the account or after you should have a nominee for your account.
- Mode of deposit: you can deposit into the PPF account via cheque, cash, demand draft, or online fund transfer.
- Risk factor: It is a risk-free Indian government Investment scheme which offers guaranteed returns.
- Rate Of Interest: 7.1% currently (as per GoI notification dated 30.12.2020).
- Joint accounts: You can have a PPF account in the name of only one person.
- Loans And Withdrawals: Loan and Partial withdrawal permitted subject to terms and conditions.
- Transfer Of Account: you can transferred your PPF account other branches or other banks or Post Offices and vice versa upon request by the subscriber.
Public Provident Fund (PPF) Vs Other Small Savings Schemes:
- Sukanya Samriddhi Yojana (SSY).
- Mahila Samman Savings Certificate (MSSC).
- Senior Citizens Small Savings Scheme (SCSS).
- National Savings Certificate (NSC)
Once your PPF account attains maturity, you can withdraw the entire deposit amount along with the interest generated in your PPF account. However, in case you are in immediate requirement of funds, you can partially withdraw from the seventh year onwards. If you are thinking for a safe and secure long term investment then PPF is a one of the best option for you, you can blindly deposit your money in this scheme because its is a Central Government Risk-Free Investment scheme with Guaranteed Returns which comes under the Exempt-Exempt-Exempt (EEE) category.