PPF is a short form of Public Provident Fund and it's one of the best long-term investment for Indian citizens, sorry to my NRI friends but you cannot invest in PPF unless you have an account already. Almost all the salaried employed person in India contribute money on EPF (Employee Provident fund) which is similar to PPF. Since this is done automatically by their employers many Indians are not aware of PPF and doesn't know much about it, I have jotted down some important points of Public Provident Fund scheme. I also didn't know much about PPF and EPF (Employee Provident Funds) until I have to change job and then I realize that either I can withdraw funds form PPF or migrate to new company. At that time, I did few more research and found useful points about Public Provident funds which I am sharing with you guys here
1. PPF is established by Government of India, so low risk.
2. PPF has a locking period of 15 years.
3. Minimum Investment amount is 500 and maximum is one lakh, which you can pay in maximum 12 installments.
4. The interest rate is 8.75% per annum which is compounded annually.
5. Though interest is compounded annually, it is calculated monthly and cut off date is 5 of each month. What this means is if you put your money before 5th of the month, you will get the interest on that amount for that month, otherwise, you won't get any interest rate, and it's a free loan to the government.
6. There is no tax on maturity amount in case of PPF.
7. Investment into PPF is exempted from Tax under section 80C. This will reduce your taxable income and help you to come into lower rate tax slabs.
8. You can extend tenure of your PPF investment in block of 5 years
9. The interest rate is not guaranteed, but decided annually by Government of India during the month of April. It is usually .25% higher than 10% government bonds.
10. You can option PPF account on SBI and ICICI bank, which also allows you to see your investment online.
11. After maturity, partial withdrawal is permitted from PPF account.
12. One person can have only one PPF account
13. You can not invest more than one lakh in PPF account, if you are found to invest more than one lakh, interest earned by extra amount will be reversed.
1. PPF is established by Government of India, so low risk.
2. PPF has a locking period of 15 years.
3. Minimum Investment amount is 500 and maximum is one lakh, which you can pay in maximum 12 installments.
4. The interest rate is 8.75% per annum which is compounded annually.
5. Though interest is compounded annually, it is calculated monthly and cut off date is 5 of each month. What this means is if you put your money before 5th of the month, you will get the interest on that amount for that month, otherwise, you won't get any interest rate, and it's a free loan to the government.
6. There is no tax on maturity amount in case of PPF.
7. Investment into PPF is exempted from Tax under section 80C. This will reduce your taxable income and help you to come into lower rate tax slabs.
8. You can extend tenure of your PPF investment in block of 5 years
9. The interest rate is not guaranteed, but decided annually by Government of India during the month of April. It is usually .25% higher than 10% government bonds.
10. You can option PPF account on SBI and ICICI bank, which also allows you to see your investment online.
11. After maturity, partial withdrawal is permitted from PPF account.
12. One person can have only one PPF account
13. You can not invest more than one lakh in PPF account, if you are found to invest more than one lakh, interest earned by extra amount will be reversed.
I opened a ppf way back in late 90s. Then I was unemployed in 2002 and left for Abroad in 2004. Is it possible to check online the amount I have in the account?
ReplyDeleteHello @Anonymous, most likely your PPF account will be dormant but if you have your account number handy, you can try checking your EPF/PPF balance online as instructed here
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