Public Provident Fund (PPF)
Overview
The Public Provident Fund (PPF) is a long-term savings scheme introduced by the Indian government to encourage individuals to build a secure financial future. It offers tax benefits and is backed by the government, making it a reliable investment option.
Key Features
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Investment Tenure: PPF has a lock-in period of 15 years, which can be extended in blocks of 5 years.
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Minimum and Maximum Deposit: The minimum annual deposit is ₹500, and the maximum is ₹1.5 lakh.
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Interest Rate: The interest rate is set by the government and is compounded annually.
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Tax Benefits: Contributions up to ₹1.5 lakh are deductible under Section 80C of the Income Tax Act, and both the interest earned and the maturity amount are tax-free.
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Nomination Facility: You can nominate one or more individuals as beneficiaries of your PPF account.
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Mode of Deposit: Deposits can be made both online and offline.
Withdrawal Rules
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Partial Withdrawal: Allowed from the 7th financial year onwards, up to 50% of the balance at the end of the 4th year or preceding year.
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Full Withdrawal: Allowed after the completion of 15 years, or in case of premature closure after 5 years with certain conditions.
How to Open a PPF Account
You can open a PPF account at a post office or through online banking services offered by various banks. The process involves filling out an application form and submitting the necessary documents.