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All you need to know about PPF investments


All you need to know about PPF investments

The Public Provident Fund or PPF is an investment scheme for 15 years under which investors get exemptions on taxes when they deposit or withdraw money or in case of interest accrual. The PPF account can be opened in your own name or the name of a minor. The minimum investment is Rs.500 and the maximum investment amount is Rs.1.5 lakh annually for PPF accounts. There can be a maximum of 12 transactions annually. However, depositing any extra amount in the PPF account will mean that this extra amount will not get you any tax rebates or earn any interest.

The PPF duration is 15 years. However, once this time period is over, you can extend the same for 1 or multiple blocks of 5 years each. The interest rate is determined for PPF by the Government of India every quarter. Currently, it stands at 7.90% and interest is paid on the 31st of March annually. Interest is calculated on the minimum balance between the 5th day and month end. You can open a PPF account through a bank or post office. Withdrawals and loans are allowed based on the age of the PPF account and the balances. Loans can be taken between the 3rd and 6th financial years onwards. Partial withdrawal can also be enjoyed from the 7th financial year onwards.

Income tax benefits are provided on the income from PPF. There is no wealth tax levied on the amount which remains outstanding. Premature payments are possible after the account has completed a minimum of 5 financial years. The nomination facility is also available for PPF accounts. The PPF account can be transferred to other banks/branches/post offices without any extra charges. One only needs to submit an application in this regard.


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