Public Provident Fund (PPF )
Public Provident Fund (PPF) scheme is a popular long term investment option backed by Government of India which offers safety with attractive interest rate and returns that are fully exempted from Tax .Investors can invest minimum Rs. 500 to maximum Rs. 1,50,000 in one financial year.
Individuals who are residents of India are eligible to open their account under the Public Provident Fund scheme. Non-resident Indians (NRIs) are not eligible to open an account under the Public Provident Fund Scheme. This is an act regulation by Indian Govt. The government of India decides the rate of interest for PPF account.
Loan facility available from 3rd financial year up to 5th financial year. Nomination facility is available in the name of one or more persons. The shares of nominees may also be defined by the subscriber. In case death of account holder then the balance amount will be paid to his nominee or legal heir even before 15 years. Nominees or legal heirs are not eligible to continue the account of the deceased.
How to Open PPF Account
You can Open PPF Account in any State Bank of India branch, or a branch of any of State Bank subsidiaries. You can also open PPF account in select nationalized banks and the post office. Further, some private banks such as ICICI bank also offer you the facility to open a PPF account.
Steps to open PPF Account
1) fill in the form
2 ) Attach a photograph
3 ) State your Permanent Account Number (PAN)
4 ) Once your formalities are completed, you will receive a pass book which will record all your PPF transactions.
How many PPF Accounts we can Open ?
At any point in your life, you are allowed to have only 1 PPF account in your name.If at any time it is seen that you have more than 1 account in your own name, the second account will be deactivated, and only your principal will be returned to you.
If you have a General Provident Fund account or an Employees Provident Fund account, you can still have a PPF account , there is no restriction.
Can we maintain PPF Account in the name of minor ?
You can also have an account in the name of a minor child of whom you are the parent / guardian. However, please remember that this will be the child’s account and you will simply be the guardian.
How to Deposit into PPF account ?
Invest in multiples of Rs 5 with a minimum investment of Rs 500 per annum. A maximum of Rs 1,50,000 per annum can be invested by one individual. Any amount invested above Rs 1,50,000 will not earn any interest.
Any amount invested above Rs 1,50,000 will not be eligible for deduction u/s 80C of the Income Tax Act, 1961. You don’t need to invest all the amount in one shot.
You can invest into your PPF the same way you would invest by way of a Systematic Investment Plan (SIP), i.e. by making up to 12 installments in a year of different amounts, but not more than 12 investments in a year.