PPF: Nowadays there is a plethora of investment options. Everyone wants to invest in various schemes to strengthen their portfolio. If you want to invest in a scheme with guaranteed returns and want to earn good money, then Public Provident Fund (PPF) can be a great option for you.
What is PPF?
PPF is a long-term savings scheme supported by the Government of India. This scheme is tax-advantaged and you get guaranteed returns by investing in it. By investing in PPF, you can not only save money for your future but also save on taxes.
Benefits of investing in PPF:
Guaranteed Returns: Guaranteed returns are given by the government on investment in PPF. Currently, 7.1% annual interest is being given on PPF.
Tax Benefits: PPF is an EEE (Exempt-Exempt-Exempt) category scheme. This means that the amount deposited in PPF, interest earned and the amount received on maturity are all tax-free.
Long Term Investment: PPF is for a period of 15 years. If you want, you can extend it in a block of 5 years. This scheme helps you invest for a long term and accumulate a large amount.
Flexibility in deposit amount: You can deposit a minimum of ₹500 per month in PPF. You can deposit every month, quarterly or annually as per your convenience.
Loan Facility: Loan can be obtained after 6 years on PPF account. This feature can help you in an emergency.
Exemption under Income Tax Act 80C: Exemption up to ₹1.5 lakh can be availed under Income Tax Act 80C on the amount deposited in PPF.
How to invest in PPF?
PPF account can be opened in any bank or post office. You will need the following documents to open an account:
Aadhar card
PAN card
proof of address
Two passport size photographs
Process to invest in PPF:
Go to any bank or post office.
Fill the PPF account opening form.
Submit the required documents.
Deposit minimum ₹500.
Your PPF account will be opened.
Example of investment in PPF:
Suppose you deposit ₹1,000 every month in PPF. After 15 years, you will receive ₹8,24,641 at 7.1% annual interest rate.
conclusion:
PPF is a safe and profitable investment plan that can help you achieve your financial goals. If you want to invest for the long term and save on taxes, then PPF is a great option for you.
Some important things related to PPF:
After opening a PPF account, you have to make a deposit at least once every year.
You can partially withdraw the deposited amount after 5 years.
You can withdraw the amount only after completion of 7 years from account opening.
You can withdraw only up to 50% of the amount deposited every financial year.
Withdrawals can be made only once.
