PPF Account : If you do your financial planning at the right age and at the right time, then you do not have to face any problem in future. Accumulating funds to meet post-retirement needs while meeting current needs is key in financial planning.
Due to lack of correct information, a large number of people are unable to manage their money. Job profession Most people want to get more profit by investing their money in a risk-free place. The best for such people is Public Provident Fund (PPF). With no risk in the PPF scheme, the returns are also better.
Compound interest is available on PPF
PPF is such a scheme in which the customer gets compound interest for 15 years. At present, interest rate of 7.1 percent is available on PPF. Compounding interest is the interest received on savings, which is calculated on both the principal amount and the interest earned in the previous period.
Any citizen of India can invest in this scheme offered by the government. In this, any person can invest from five hundred rupees to 1.5 lakh per month. PPF account can be opened in any bank or post office. Along with this, you can also open your PPF account online if you want. To open a PPF account, first of all it is necessary to have a savings account in the bank.
How much amount will be received on maturity
For example, if someone invests two thousand rupees every month in PPF account. So in one year Rs 24 thousand is invested by him. Accordingly, a total investment of Rs 3.60 lakh was made by the person in 15 years. The compound interest of 7.1 percent on this invested amount is Rs 2,90,913. Accordingly, a total of Rs 6,50,913 will be received at the time of maturity.
What is ppf account
PPF stands for Public Provident Fund . It is a popular long term savings and investment scheme in India, backed by the Government of India. PPF accounts are designed to encourage individuals to save for their retirement and provide them with a safe and tax-efficient investment option. The fixed tenure of PPF account is 15 years. After the initial 15 years, the account can be extended indefinitely in blocks of 5 years.
The interest rate on PPF accounts is determined by the government and is subject to revision from time to time. Interest is compounded annually and is currently tax-free. In this, the minimum investment per year is Rs 500 and the maximum investment allowed in a financial year can be up to Rs 1.5 lakh. Contribution can be made in lump sum or in maximum 12 installments per year.
Will get tax benefit
Contribution made to PPF account is eligible for tax benefits to the extent prescribed under section 80C of the Income Tax Act. The interest earned and maturity amount are also tax-free. Partial withdrawal is permitted from the seventh year onwards, subject to certain conditions. The account holder can withdraw up to a specified limit based on the balance in the account.
After the third financial year, the account holder can avail loan against PPF balance up to the specified limit. PPF accounts can be transferred from one authorized bank or post office to another, making it convenient for the relocating account holders.
The account holder can nominate a beneficiary to receive the proceeds of the PPF account in the event of death of the account holder. After the initial 15-year maturity period, the account can be extended for another 5 years with or without additional contribution. The account continues to earn interest during the extended period.
How to open PPF account
Any person can open a Public Provident Fund (PPF) account in India. PPF account can also be opened for minors with parent or guardian as guardian. In which bank branch or post office can the PF account be opened? PPF account can be opened in various bank branches and post offices in India.
Many public and private sector banks provide PPF account services. Go to the bank branch or post office where you want to open a PPF account. Carry the necessary documents like identity proof, address proof, passport size photograph, and PAN card. Request application form for opening PPF account from bank / post office. You can also download the form from the bank’s website, if available. Along with the filled application form, deposit the required amount for opening PPF account.
