Public Provident Fund: PPF is the most popular scheme among the general public. Because, PPF investments with good interest, interest and maturity amount are completely tax free.
Public Provident Fund: Public Provident Fund (PPF) is considered to be a great savings instrument. Long term investment helps in building a large corpus in this. PPF is the most popular scheme among the general public. Because, PPF investments with good interest, interest and maturity amount are completely tax free. The maturity period of PPF is 15 years. Earlier, money can be withdrawn from the scheme only on certain conditions. If an investor wants to close the account, then special conditions have been given for that. PPF account can be closed even before time.
When can PPF account be closed?
PPF account holder can withdraw money before maturity in case of saving himself, spouse and children from life-threatening diseases. At the same time, money can be withdrawn from PPF account before maturity in case of own education or higher education of children. In case the account holder becomes an NRI, the PPF account can be closed before maturity. PPF account can be closed after completion of exactly 5 years from the date of opening. However, during this period 1% interest will be deducted from the date of account opening.
How will the account be closed in the event of the death of the PPF account holder?
If the account holder dies before the maturity of the PPF account, then his nominee can withdraw the money. In such a situation, the condition of completing 5 years of the account also gets rejected. After the death of the account holder, his Public Provident Fund account is closed. The money is given to the nominee or to the legal heir. But, the same account is not allowed to be carried forward.
Get the benefit of compounding interest
Any Indian citizen can open PPF account. For this he will have to prove it. The account can also be opened in the name of a minor. The interest rate on PPF is decided by the government and being a government scheme, the government guarantee is also available. The interest is changed on a quarterly basis. At present, 7.1 percent interest is being available on PPF. However, interest is calculated annually. One can start with an investment of Rs 500 in PPF and there is an exemption to put a maximum of Rs 1.5 lakh in a financial year.