🚂 Current Fix Deposit Rates 🌞 SBI - General Citizen 3% to 7.10% Senior Citizen - 3.60% to 7.60% 🌞 HDFC - General - 3.00% to 7.25% Senior Citizen - 3.50% to 7.75% 🌞 ICICI - General - 3% to 7.10% Senior Citizen - 3.50% to 7.60% 🌞 PNB - General - 3.50% to 7.25% Senior Citizen - 4% to 7.75% 🌞 Kotak Mahindra - General - 2.75% to 7.20% Senior Citizen - 3.25% to 7.70% 🌞 Axis - General - 3.50% to 7.10% Senior Citizen - 3.50% to 7.85% 🌞 Bank of Baroda - General - 3% to 7.25% Senior Citizen - 3.50% to 7.55% 🚂 Current Recurring Deposit Rates 🌞 SBI - General 4.40% to 5.50% Senior Citizen 4.90% to 6.20% 🌞 ICICI - General 3.50% to 5.50% Senior Citizen 4% to 6.30% 🌞 HDFC - General 4.40% to 5.50% Senior Citizen 4.90% to 6.25% 🌞 KOTAK - General 4.30% to 5.20% Senior Citizen 4.80% to 5.70% 🌞 AXIS - General 4.40% to 5.75% Senior Citizen 4.65% to 6.50% 🌞 IDBI - General 7% to 7.15% Senior Citizen 7.50% to 7.65% ☁️ National Pension Scheme - 9% to 12% pa ☁️ Employees Provident Fund - 8.15% pa ☁️ Public Provident Fund - 7.1% pa Public Provident Fund (PPF)

Ticker

Horizontal Responsive

Public Provident Fund (PPF)


The Public Provident Fund (PPF) is a long-term savings and investment scheme, it is Indian government scheme was introduced in 1968. Since it is backed by government, the safe and secured. Public provident fund launched to inspire individuals to save or invest for to secure their retirement or old age.  Public Provident Fund is a very good investment plan having tax benefits and an attractive return on the investment.

Here are some key features about the Public Provident Fund:

Eligibility: For opening a PPF account investors must be an Indian citizen or Non-resident investors are not eligible to open an account, but NRIs are those are already have an PPF account became continue maintain their account until maturity.

Account Duration: Maturity period of Public Provident Fund is 15 years, even account holder can extend the investment for 5 years more.

Limits: Minimum contribution or deposit INR 500 and maximum INR 1,50,000 Per annum.  It can be made lump sum or 12 installments per annum.

Interest Rate: The interest rate on PPF is vary or as per the changes in government policies but normally higher than the all savings accounts.  It can compounded calculate and absolutely tax free at the time of maturity.

Tax Benefits:  Public Provident Fund investment qualifies for tax deduction under Sec. 80C of IT Act, and there is no tax on interest on maturity amount.

Withdrawals and Loans: Partial withdrawals facility available from the 7th year onwards or depends upon the limits and conditions.  After three years of contribution you apply for the loan.

Nomination: One or more nominees are eligible to receive the balance of Public Provident Fund incase account holder’s demise.  Nomination is a compulsory at the time of application form filling. 

Accessibility: You can open Public Provident Fund in Post Offices, Nationalized Banks or Authorized financial institutions.  Branch to branch or bank to bank account transfer facility available in PPF.

Multiple Accounts: Only Individual can apply or open single PPF account.

Before investing in PPF account suggested to verify all the information by going personally at Bank or Post office or take a advice from financial expert before taking decision. 

 

 

 

An example of how PPF works:

Example:

Mr. Pradeep, a 29 year old mechanical engineer, looking for a safe investment plan to secure his life or future, he checked various options but finally he decided to open public provident fund account due to its security and tax benefits. 

1. Opening the Account:

Pradeep visits bank and asked for the application form, he filed the application and submits all the necessary or required documents like Aadhar Card , PAN card, Electricity Bill or any address proof, Photos etc., along with the INR 10000 an initial deposit.

2. Investing and Deposits:

As per the PPF rules and regulations, pradeep can start investing minimum of INR 500 and maximum of INR 1,50,000 pa in his PPF account , but he decided to contribute INR 1,20,000 every year for to good returns along with tax benefits.

3. Interest Calculation:

The PPF interest rates for the current financial year is 7.1% is compounded annually i.e.,

Yearly investment = INR 1,50,000

Interest rate = 7.1%

Earned = INR 8520

Pradeep’s ppf account will increase by an interest of INR 8520 and it will be compounded every year.

4. Lock-in Period:

Public Provident Fund lock in period or tenure is 15 years, so he cannot withdraw the whole amount on or before completion of 15 years.  Partial withdrawals possible on or after 7 year of PPF account.

5. Tax Benefits:

As per IT section 80C of Income Tax Act, now the pradeep his eligible for taking income tax benefits upto maximum of INR 1,50,000 per year.  The amount and interest which he will get at the time maturity are completely tax free.

6. Maturity and Extension:

After the maturity, pradeep  can withdraw the entire amount along with the interest eared or he has option to extend the same account further for 5 years, he can also make deposits continuously to earn additional  interest.

By using the Public Provident Fund scheme, Pradeep has not only built a considerable retirement corpus but also benefited from tax deductions and exemptions, using skill and strategic plan or wise financial decision for his long-term goals, he make his life financially study and secure.


Tags: