Retirement Scheme: Whenever people think about investing, the first thing that comes to mind is an FD, or Fixed Deposit. However, FDs don’t offer such high returns on long-term investments. For higher returns, the government operates special schemes, including PPF. PPF is a safe and reliable small savings scheme run by the Government of India, which provides investors with stable returns over the long term.
This scheme is considered especially beneficial for those who want to accumulate a large sum for their retirement without taking any risks. PPF offers tax benefits on maturity, making it one of the most popular savings schemes.
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What is the interest rate?
The government sets the interest rate on PPF every quarter. Currently, it offers an annual interest rate of 7.1%. A PPF account can be opened for a period of 15 years. Investors can also extend it further. If an investor wants to create a fund of Rs 20 lakh in 15 years, they will have to deposit approximately Rs 73,000 annually. After adding 7.1% interest, the total amount will reach Rs 20 lakh. This investment is completely tax-free.
Who can open an account?
People from all walks of life can open a PPF account. An account can also be opened in the name of a minor, but according to the rules, a person can open only one PPF account. Joint accounts are not allowed. You can invest a minimum of Rs 500 and a maximum of Rs 1.5 lakh in PPF every year.
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Where to open an account?
If you are thinking of opening a PPF account, you will have to fill out a form at a bank or post office. Several investment options are available. The account can also be extended for a period of five years. This account can be extended multiple times. Additionally, a PPF account can be transferred from one office to another or from one bank to another. There are no charges for this.
These facilities are available:
Loans and partial withdrawals are also possible from a PPF account. Investors can take a loan after three years, depending on the minimum account tenure and deposit amount. Partial withdrawal is available after the account has completed 7 years. Therefore, PPF investment is a safe and reliable option for the long term. It not only provides regular and assured returns but also offers investors the benefit of tax exemption.