What are the Benefits of PPF Account?

What is PPF?

PPF stands for Public Provident Fund. It is one of the most admirable investment schemes that comes with different benefits. Now let's understand the benefits of a PPF account:

PPF is a low-risk investment scheme that gives stable returns over a maturity period of 15 years. It's the safest investment option available for investors because it has the support of the Government of India.

PPF is a long-term investment scheme useful for people who are looking to save and grow their money.

Importance of PPF Account

In recent years people are getting more interested in the stock market. Almost everyone has a little bit of an idea about the share market. But very few people are ready to invest on a regular basis.

And the reason is very simple: not everyone has the financial independence to take risks. So people look for safer options, to prevent the loss of money.

PPF does the same thing: it provides stability and helps people to generate income over some time.

PPF Account Benefits

When you open a PPF account it provides the following benefits:

PPF Interest Rate	7.1% per annum
Minimum Deposit	Rs. 500
Maximum Deposit	Rs 1.5 lakh per annum
Maturity Period	15 years
Risk Analysis	Risk-free and Guaranteed returns.

Tax Benefits: Opening a PPF account helps you in saving tax. Although there are rules where tax deductions happen.

For example: You are eligible for tax deductions as per section 80C of the Income Tax Act when your annual investments are up to Rs. 1.5 lakhs.

Extension of Tenure: The lock-in period of a PPF account is 15 years. If your account gets mature and you want to further invest then an extension of 5 years is applicable.

Partial Withdrawals: You cannot completely withdraw funds until the 15th year. But you can have partial withdrawals every 7th year from the activation of your account.

Interest rates: The interest rate changes as per the government guidelines. PPF provides higher interest rates than regular bank accounts. Currently, the interest rate is 7.1% which is more than the regular savings account.

Nomination Facility: PPF account holders can have one or more nominations who can manage the account after the demise of the account holder. You can easily nominate an account using the form E. You can get this form from the bank or the post office where your account is.

Also, Check - How to Download Pan Card Online

How to open a PPF Account?

There are two ways by which you can open your PPF account offline and online. You can open your PPF account online by visiting the portal/website of the bank or post office.

Keep the following documents with yourself at the time of opening your account :

1. A passport-size photograph.

2. Identity verification documents like Aadhar Card, Driving License, and Voter’s ID by your side.

3. Make sure you have a PAN card also.

4. Residential Address.

5. Form E for nominee declaration.

FAQ’s

Q.1 Can I have multiple PPF accounts?
Ans. You can have only one PPF account. If you try to create another one then the government has the right to merge it into a single account.

Q.2 Is PPF better than FD?
Ans. In PPF there is no tax on the interest rate but in FD it happens. Therefore preferring PPF over FD is a good choice.

Q.3 How to close a PPF account before maturity?
Ans. To close the PPF account you have to fill the Form C and attach all the necessary documents with it. Under certain conditions, PPF accounts can be closed like life-threatening diseases, higher education etc.