Schemes like PPF account, NPS, SCSS are government-backed, which can be either opened through a registered Post Office or bank. So, here are these seven things you need to consider while opening a PPF.
What is a PPF account?
It is a long-term investment scheme launched by the Finance Ministry’s National Savings Institute in 1968.
PPF is a safe deposit scheme declared by the Government of India that offers tax exemption and attractive interest rates.
What are the benefits?
There is a whopping 15-year lock-in period for your savings deposit with PPF account.
The interest rates are comparatively high for PPF, with 8 per cent per annum.
The depositor of PPF gets exemption on tax for his investment and interest under Section 80C of the Income Tax Act.
The deposit amount to open a PPF account is as low as INR 500 and maximum of INR 1.5 lakh. Deposits should be in multiples of INR 5.
The partial withdrawal facility is available after five years of completion.
If you wish to extend the maturity, you can request for account extension for an additional five years.
Deposits to Public Provident Fund can be made in the form of a cheque, cash or online transfer.
Is it possible to open a PPF account online?
Yes, you can open a PPF account online. Many banks provide online facility to open a PPF account.
To deposit the contribution, you can make an online fund transfer. Go to the bank website and apply online for PPF.
What are the eligibility criteria for a Post office PPF?
Any individual who is a citizen of India can open a PPF account in a post office.
Only one account can be opened for an individual. In case you open more than one, only the principal amount will be refunded back. You will not get any interest from the second account.
If you are planning to open a PPF account for a minor, the facility is available. But in case of death of the father or mother, the child cannot continue operation of the account. And it will be thus closed.
What are the documents needed for a Post Office PPF account?
ID proof – like Voter’s ID, driving license, Aadhaar card etc. should be submitted.
Address proof – Voter’s ID, passport, driving license, Aadhaar card etc. should be submitted.
PAN card.
What is the interest rate offered for PPF account?
For the financial year 2019-20, the rate of interest is 8 per cent per annum.
What is the maturity period in a post office?
The maturity period of the PPF scheme is 15 years from the date of opening the account.
Extension facility is also available for an additional five months lock-in period.
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