The Public Provident Fund (PPF) has been the preferred means of saving for investors for many decades. Returns from PPF is better than FD. The second major benefit of this account is that, on investing, tax deduction under Section 80C of the Income Tax Act is also available. No income tax has to be paid under Section 10 of Income Tax on the amount received on maturity in PPF.
Investors' interest in PPF remains intact even with the reduction of interest rates on fixed deposits (FD) over the past few years. PPF is a 15 year old scheme, which has a lock-in period of 5 years. You can open a PPF account at the bank branch and post office. Some banks also provide facility to open online PPF accounts. Read also: Have you prepared to file income tax returns? The special feature of the PPF account is that you can transfer the PPF account from the post office to the open and open PPF account at the post office in the bank and bank.
There is no age restriction to open a PPF account. Even if your EPF account is open, you can still open a PPF account.
PPF account can be deposited up to a maximum of 12 times a year. But interest of the whole month will only be available if you have deposited money in PPF account before 5th day.
The rule of getting interest in PPF is that the amount of money that comes before the 5th day is available only on the interest. Also interest is calculated on the deposit amount at the end of the month.
How much money can you deposit?
In order to maintain the PPF account, the minimum investment limit is 500 rupees. But a maximum of 1.5 lakh rupees can be invested in a financial year.
Anyone can open a PPF account in the name of a minor child. But the investment amount of both cannot exceed Rs 1.5 lakh. If you deposit more than 1.5 lakhs in the PPF account, you will not get any interest on it.
How many accounts can open? Anyone can open a PPF account by their name. When filling this PPF account form, you will also need to inform that you already have a PPF account. If you have a PPF account in your post office, you can not open another account in the post office. If you have an account in the post office like this, you can not open another account in the bank's branch. If you accidentally opened two accounts, the second account would be considered invalid and no interest would be found on the deposit amount. Also read: It is not difficult to file an income tax return, such that, before closing the account, there is a loan facility in lieu of PPF. Apart from this, partial withdrawals can also be done. Now the PPF account can be closed before the maturity period. However, the account will be closed only if you have deposited the funds for 5 consecutive financial years. You can close the account for the treatment of yourself, wife, child and parents for any serious illness. Apart from this, you can also close your PPF account after 5 years for the child's higher education.
There is no nomination column in the form of PPF for the nominee (Farm-A). There will be a separate form for this. For this, you have to fill in Form- E.
