PPF (Public Provident Fund) is a saving-cum-tax saving scheme in India (started in 1968 by National Saving Institute of the Ministry of Finance) by Central Government. The goal is to mobilize small savings by offering an investment with reasonable returns combined with income tax benefits. (Tax exemption : EEE)
The interest rate is 8% per annum (compounded annually) ( for year 2017-18 ) and it’s tax free (contribution under 80C and interest earned is fully exempted without any limit). Anyone individual Indian resident(including minor but not NRIs) can open an account with any nationalized bank or post office or some authorized private banks also. The duration is 15 years and one can deposit anywhere between Rs. 500 (minimum) to 1.5 lac (maximum) per year.
Some Facts About PPF
- Interest rate : 8.1%
- Duration of scheme : 15 years
- Minimum deposit amount (per year) : 500
- Maximum deposit amount (per year) : 1,50,000
- Number of installments every year : 1 (Min) to 12 (Max)
- Number of accounts one can open : Only One
- Lock-in period : 15 years (partial withdrawals can be made from the sixth year)
- Extension of PPF Account : After the maturity period (15 years), it can be extended for a period of 5 years
- Tax savings (contribution) : under section 80C (upto 1.5 L)
- Tax savings (interest earned and final amount) : fully exempted from wealth tax
