Public Provident Fund (PPF) is a long-term investment scheme launched by the Government of India. This plan offers good interest rates and allows the policyholder to start the plan with low investment.
Thus, a person can start a PPF account with as little as Rs 500, while the maximum amount that can be invested in it in a financial year is Rs 1.5 lakh. Not only this, the PPF scheme also gives the facility of loan and partial withdrawal to the account holder after a period of time.
Benefits of PPF Scheme
Being a safe plan, PPF account offers many benefits including tax deductions.
1. Eligibility Criteria
PPF account is equally available to all. Any person can open SBI PPF account in his own name. In case of a minor, it can be opened on behalf of the minor child through parents and guardians.
2. Investment limit
As mentioned earlier, the minimum amount that can be invested under this scheme is Rs.500 while the maximum amount is Rs.1.5 lakh per annum. The policyholder can invest by paying a lump sum amount or it can be done in 12 easy installments in a year.
3. Long policy term
The maximum term for a PPF account is 15 years. However, after the maturity of the policy, the policyholder can extend the term of the account for another 5 years
4. Best interest rates
The PPF interest rate is decided by the Central Government every quarter. The current rate of interest is 7.1% per annum, calculated on the minimum balance in the account and reckoned from the 5th day till the end of the month
5. Tax Exemption
SBI PPF accounts allow tax benefits under section 80C of the Income Tax Act. The returns received under this scheme are also tax free.
6. Easy Loan and Withdrawal Facility
The PPF scheme allows easy availability of loans and withdrawals based on the age of the account as well as the balance available in the PPF account.
7. Nominee facility
PPF account is available with nominee facility. Policyholder can nominate one or more person as nominee and also decide how much to pay to different nominees
8. Account Transfer
Another advantage of PPF account is that it allows the policyholder to transfer the account. So, you can transfer your PPF account to any other branch of your bank, to any other post office or to a new bank without any charges.