Public Provident Fund (PPF) is a long-term investment option offered by the government of India to its citizens. It is considered to be one of the most secure investment options available, as it is backed by the government. The objective of PPF is to provide financial security to individuals and to encourage savings for their future. In this guide, we will cover all the key aspects of PPF investment, including its features, benefits, eligibility, investment process, and more, to help you maximize your PPF investment.
Features of PPF Investment
- Long-term Investment: PPF is a long-term investment option with a maturity period of 15 years, which can be extended in blocks of 5 years after maturity.
- Guaranteed Returns: PPF is a guaranteed investment option as it is backed by the government. The interest rate on PPF has been revised annually and is currently at 7.1%.
- Tax Benefits: PPF investment is eligible for tax benefits under Section 80C of the Income Tax Act. The investment made, interest earned, and maturity amount are all exempt from tax.
- Loan Facility: PPF account holders can avail of a loan against their PPF account after the completion of one financial year from the date of opening the account.
- Nomination Facility: PPF account holders can nominate a person to receive the maturity amount in the event of their death.
- Partial Withdrawal: PPF account holders are eligible for partial withdrawals after the completion of seven financial years from the date of opening the account.
Eligibility for PPF Investment
- Indian citizens, including minors, can open a PPF account.
- Non-resident Indians (NRIs) are not eligible to open a PPF account.
- PPF accounts can be opened in any designated post office or authorized bank.
Investment Process
- Choose an Authorized Bank or Post Office: PPF accounts can be opened in designated post offices or authorized banks. You can choose an institution based on your convenience and the services offered by them.
- Fill out the PPF Account Opening Form: The PPF account opening form can be obtained from the authorized bank or post office. Fill out the form with all the required details and submit it along with the necessary documents.
- Initial Deposit: The minimum initial deposit for opening a PPF account is Rs. 500, and the maximum limit is Rs. 1.5 lakh per financial year.
- Deposit Regularly: You can deposit money into your PPF account at any time during the financial year, up to a maximum limit of Rs. 1.5 lakh per financial year.
- Interest Calculation: The interest on your PPF account is calculated on the minimum balance between the 5th and last day of each month.
- Maturity and Withdrawal: The PPF account matures after 15 years, and you can either withdraw the maturity amount or extend the account for a further block of 5 years.
Benefits of PPF Investment
- Guaranteed Returns: PPF is a guaranteed investment option, which means that the returns are secure and not subject to market fluctuations.
- Tax Benefits: PPF investment is eligible for tax benefits under Section 80C of the Income Tax Act, which means that the investment made, interest earned, and maturity amount are all exempt from tax.
- Long-term Investment: PPF is a long-term investment option with a maturity period of 15 years, which makes it ideal for long-term financial planning.
PPF Calculator
A PPF calculator is a simple online tool that helps you calculate the amount you will receive at maturity based on your PPF investment. By inputting the initial deposit, the number of years you plan to invest, and the interest rate, you can calculate the maturity amount and the interest earned over the investment period. The PPF calculator is a helpful tool for those who are considering investing in a PPF account as it provides an estimate of the returns on their investment and helps them plan their financial goals accordingly. With a PPF calculator, you can easily determine the amount you need to save each year to reach your financial goals and make the most of your PPF investment.