Looking To Invest In Public Provident Fund? Here’s What You Should Know

A PPF subscriber can claim income tax exemption under Section 80C for up to Rs 1.5 lakh in a particular financial year, and you just need Rs 100 to open the account.

New Delhi: Public Provident Fund or PPF remains one of the most attractive small saving schemes offering substantial risk-free return. Moreover, the instrument gives risk-free return which is income tax exempted.

What is PPF?

Introduced in 1968, Public Provident Fund (PPF) helps to mobilize small saving in the form of investment with certain returns. It can be used to build a retirement corpus while saving on annual taxes. Also Read: SBI Customer Alert ! Digital Services To Be Hampered Due To Maintenance From Tonight, Check Details Here

What is the minimum deposit amount?

A PPF subscriber can claim income tax exemption under Section 80C for up to Rs 1.5 lakh in a particular financial year. You just need to deposit Rs 100 in order to open a PPF account. However, to keep the account active, you have to deposit at least Rs 500 in a financial year. It is also important to know that a maximum of 12 deposits in a financial year can be done. Hence, if you have opened the PPF account, you need to ensure that the minimum PPF balance on 31st March of that financial year is maintained at Rs 500.

How many deposits you can make in a financial year?

A subscriber can make a maximum of 12 deposits in one's PPF account. So, if you have opened the PPF account, make sure you make a minimum contribution throughout the year so that you can maximise the deposit limit. It is advised to make regular monthly deposit in your account.

What you should know about withdrawal?

A PPF subsciber should know that account has a maturity period of 15 years. However, PPF withdrawal rules allow an investor to withdraw money before the maturity period. It also allows PPF account holders to take loan against PPF at mere 1 per cent interest rate. According to the rules, PPF withdrawal is allowed from sixth year of the PPF account opening. A PPF account holder, who is trying to look for funding can consider this option only if the PPF account is more than five years old.

Also, those who are no ware, an account holder can take loan against their account from 3rd to 6th year of PPF account opening and the PPF loan interest rate is just 1 per cent.