PF - Provident Fund
– PF means Provident Fund (Bhawisya nidhi), if you want to become an investor of PF, then you have to know all about PF.
Types of PF - Provident Fund
- EPF – Employed Provident Fund
- PPF – Public Provident Fund
- GPF – General Provident Fund
- VPF – Voluntary Provident Fund
What is PPF -Public Provident Fund
– PPF stands for Public Provident Fund scheme, It is a very low risk and profitable scheme for all peoples. In one word a long term investment plan which offers high rate of interest & secure for you.
When open a PPF (Public Provident Fund) Account it deposit a remain safe. You add more money every months, then the interest will grows on the total amount and making your saving money grow over the time.
Importance of PPF (Public Provident Fund) scheme
– PPF (Public Provident Fund) scheme is a guaranteed and high return plan. Any person other than employed can open a account. like small shopkeeper, business man, unemployed, retired, etc.
PPF Account makes money from your money. Those who want assured returns without any risk can invest some part of their savings every months in it.
Eligibility Carateria - Who can open PPF Account
- Any Individuals (Indians) can open PPF Account.
- A guardians on behalf of minors / unsound mind.
- One person can be open only one account all across the country with any bank.
Features of a PPF Account
- Guaranteed and risk-free return scheme.
- For all Individuals.
- In PPF Account, minimum deposit Rs.500 /- and maximum deposit Rs.1,50,000 per year.
- you can convert your one time deposit amount to easy installment.
- From 01.01.2024 PPF Account latest Interest rates are 7.1% p.a.
- Account will be matured after 15 FY.
- After maturity, account can be extended for any number for a block of 5 years with further deposits.
- withdrawal is permissible every year after 5th-7th years.
- Pre mature closure shall be allowed after 5-7 years from the end of the years in which the account.
- Loan facility is available from 3rd financial year up to 6th financial year.
- Tax Benefits (Interest earned is Tax Free).
Deposit in PPF Account
- In PPF Account, minimum deposit Rs.500 /- and maximum deposit Rs.1,50,000 per year.
- Maximum limit of Rs.1.50 lakh shall be inclusive of the deposits made in his/her own account and in the account opened on behalf of minor.
- Amount can deposit in any number of installments in a FY in multiple of Rs.50 and maximum Rs. 1.5 lakh.
- Amount can be opened by cash/cheque.
- Deposit quality for deduction under section 80C of Income Tax Act.
PPF Interest Rate 2024
- PPF Account latest Interest rates are 7.1% p.a.
- Interest shall be applicable as notified by Ministry of Finance on quarterly basis.
- The interest shall be calculated for the calendar month on the lowest balance in the account between the close of the fifth day and the end of the month.
- Interest shall be credited to the account at the end of each Financial year.
- Interest earned is tax free under Income Tax Act.
Withdrawal in PPF Account
- An Individual can take 1 withdrawal during a financial after 5-7 years excluding year of account opening.
- Amount of withdrawal can be taken up to 50% of balance at the credit at the end of 4th preceding year or at the end of preceding year, whichever is lower.
Maturity for PPF Account
- Account will be maturity after 15 F.Y. years excluding FY of account opening.
- Depositor can take maturity payment by submitting account closure form along with passbook.
- Depositor can retain maturity value in his/her account further without deposit, the PPF interest rate will be applicable and payment can be taken any time or can take 1 withdrawal in each FY.
- Depositor can extend his/her account for further block of 5 years and so on by submitting prescribed extension form.
- In extended account with deposits, 1 withdrawal can be take in each FY subject to maximum limit 60% of balance credit at the time of maturity in the block of 5 years.
Per mature
- Premature closure shall be allowed after 5-7 years from the end of the year in which the account was opened.
- Conditions :- incase of life threatening disease of account holder, spouse or dependent children, higher education, change of resident status of account holder.
- At the time of premature closure 1% interest shall be deducted from the date of account opening.
- Account can be closed on above conditions by submitting prescribed from along with pass book.
Loan in PPF Account
- Loan can taken after the expiry of one year from the end of the FY in which the initial subscription was made.
- Loan can taken before expiry of five years from the year in which the initial subscription was made.
- Only one loan can be taken in a FY.
- Loan can be taken up to 25% of balance to his credit at the end of the second year immediately preceding the year in which loan is applied.
- Second loan shall not be provided till first loan was not repaid.
- If loan repaid within 36 months. then interest rate @ 1% per annum shall be applicable.
- If loan repaid after 36 months. then interest rate @ 6% per annum shall be applicable.
PPF Account FAQs :
Q. How many PPF Account can one have ? An individual can open only one PPF Account in the country, either at a Bank or Post Office.
Q. what is the minimum lock-in period for a PPF investment? The real term of the PPF Account is 15 years, which is the minimum lock-in time for a PPF Account.
Q. What is the interest of Loan against PPF Account? If loan repaid within 36 months. then interest rate @ 1% per annum shall be applicable. If loan repaid after 36 months. then interest rate @ 6% per annum shall be applicable.
Q. What is the charge of Pre mature closure in PPF Account ? At the time of premature closure 1% interest shall be deducted from the date of account opening.
Q. How much can I withdraw from my PPF Account? After five to seven years, Amount of withdrawal can be taken up to 50% of balance at the credit.
Q. How can convert a minor’s PPF account into a major’s? When a minor account holder becomes a major or turns 18 years old, then can change the status of the account from minor to major via Bank’s or Post Office mobile application / by visiting branches and submitting form and age proof.
Q. Can I close my account before 15 years? Individuals are only permitted to close their PPF accounts after five years. In addition, certain requirements must be met in order to close the account.