Many people want to invest in schemes that allow money withdrawal before maturity if needed. In this regard, the Public Provident Fund (PPF) is a good option. This scheme is suitable for long-term investment. Many financial advisors recommend including this scheme in retirement planning. Its features are very attractive. It is also good from a tax point of view. There is no tax on the maturity amount, and no tax on the interest either. If the taxpayer follows the old income tax regime, they can also claim a deduction under Section 80C.
PPF Matures in 15 Years
Public Provident Fund (PPF) ends after 15 years. The government changes its interest rate every three months. Right now, the interest rate is 7.1 percent. This scheme is safe because it is supported by the government. People who do not want to take risk can choose this scheme. You can also get a tax benefit by investing up to ₹1.5 lakh in one year.
Withdrawal Before Maturity
One important feature of PPF is that you can take out some money before 15 years. But there are some rules for this. You can withdraw a part of the money after 5 years from the date of opening the account. You can take up to 50 percent of the balance after the fourth year. For example, if you opened a PPF account on January 1, 2024, and you have ₹3 lakh in the account on January 1, 2028, then you can take up to ₹1.5 lakh after January 1, 2029.
Closing the Account Early
If you need money for medical treatment or education, you can close the account before 15 years. But the account should be at least 5 years old. If you close it early, you will have to pay a 1 percent penalty on the total interest. Another feature of PPF is that after 15 years, you can extend the account for 5 more years.