PPF from interest rate to eligibility, know here how to earn money safely
Every person wants to earn a smuch as possible and that too safely. Well, earning as much as possible depends on a person’s skills, intellect and a dash of luck. Not everyone is blessed with these. So, for the rest of us, the best way to earn money is to do so safely. Also, we must look for the highest returns possible. One of the best rates of return are offered by the Public Provident Fund (PPF). PPF is a 15-year investment scheme under which an investor enjoys tax exemption at the time of deposit, accrual of interest and withdrawal. The PPF Scheme looks at making small savings by investors a lucrative investment option in the long run. But are you eligible? Will the rate of interest suit you, or not? Find out.
ELIGIBILTY: You can open your PPF account in your own name as well as on behalf of a minor.
INVESTMENT LIMITS: A minimum of Rs 500 and a maximum of Rs 1.5 lakh per annum can be deposited every year in a PPF account at present. Deposits can be done maximum in 12 transactions. However, you must note that if you deposit more than Rs1.5 lakh in your PPF account per annum, the excess amount will neither earn any interest nor will be eligible for rebate under Income Tax Act.
PPF DURATION: The Original duration of your PPF is 15 years. But, after completion of the duration, you can submit an application, after which it can be extended for 1 or more blocks of 5 years each.
RATE OF INTEREST: The rate of Interest for PPF is determined by the government on quarterly basis. At present it is pegged at 7.90 per annum with effect from 01.04.2017. Interest is paid on 31st March every year. Interest is calculated on the minimum balance between 5th day and end of the month.
ACCOUNT OPENING: A PPF account can be opened either directly through a post office or through a bank. But all banks do not provide this option. Banks like State Bank of India, ICICI Bank, Punjab National Bank, etc have this option. Before opening an account you can check with your bank.
LOANS AND WITHDRAWALS: Loans and withdrawals are permitted depending upon the age of the account and balances as on the specified dates. Specifically Loan can be availed between 3rd to 6th financial year. Furthermore, partial withdrawal facility can also be availed from 7th financial year onwards.
INCOME TAX BENEFITS: Income Tax benefits are available under 80C of income tax. Interest on income is totally exempt from Income Tax while the amount outstanding to the credit is fully exempted from Wealth Tax.
PREMATURE PAYMENT: Premature payment is allowed only after the account or the account of the minor account holder of whom he/she is the guardian has completed five financial years. You can do only if you require the payment for the treatment of serious ailments or life threatening diseases or for higher education. A valid proof or documents must be furnished for this.
NOMINATION: Nomination facility is available in the name of one or more persons. The shares of nominees may also be defined by the subscriber.
ACCOUNT TRANSFER: You can transfer your PPF account to other branches/ other banks or Post Offices and vice versa free of charges. For this you will have to submit an application.