Public Provident Fund i.e. PPF is a very popular saving scheme of the Government of India for long-term savings. In this, you can deposit an amount ranging from a minimum of ₹500 per annum to ₹1.50 lakh per annum. Anyone who is looking for a safe investment option to save tax and get guaranteed returns should open a PPF account.
The investment amount made in this becomes eligible to claim a tax deduction of up to ₹1,50,000 under Income Tax Section 80C. This reduces your tax liability. This scheme is a fool proof way to make your financial future secure and prosperous.
PPF Scheme
PPF (Public Provident Fund) is considered an excellent investment option. It is a great instrument for those who are not comfortable taking risks. Although there is a limit to the returns, as it is not linked to the market, it does provide stability. Investing in PPF can help diversify your portfolio! It can form a strong foundation for your financial planning.
Where to open a PPF account
PPF accounts can be opened anywhere, be it a bank or a post office. Just keep in mind that you can open only one PPF account anywhere. Opening more than one account is not allowed. The interest earned on a PPF account is not taxable under Income Tax. The tenure of this account is 15 years. However, after this period you can extend it for another 5 years.
However, there is no maximum limit for extending the tenure of the account, provided you extend it in blocks of 5 years. However, you can extend the tenure only on the maturity of each block. This helps you achieve long-term financial goals.
Documents required to open a PPF account
When you go to open a PPF account in a bank or post office, you will need a duly filled account opening application form, and KYC documents like an Aadhaar, voter ID card, driving license, etc. Proof of residential address nominee declaration form and passport-size photo will be required. You can add the nominee’s name to this account either initially or later. These documents are important for streamlining the process.
How much interest is being offered on PPF
PPF is currently offering 7.1 percent annual interest. Since it is a Government of India scheme, the Finance Ministry reviews the PPF interest rate every quarter and makes any amendments. A PPF account cannot be opened jointly, even if you want to open a joint account with your spouse or other family members. This ensures that your savings are in safe hands.