You Must Know About PPF Benefits, Check Here.

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4 lesser-known benefits of PPF you must know.

Public Provident Fund (PPF) scheme is a popular long term investment option backed by the government which offers safety with attractive interest rate and returns that are fully exempted from Tax. Investors can get facilities such as loan, withdrawal and extension of account. Public Provident Fund (PPF) account can be opened by resident Indian individuals and individuals on behalf of minors.



 

PPF Features:

  1. The attractive interest rate of 7.9% that is fully exempted from Income Tax under Section 80C
  2. Good long term investments of 15 years
  3. Deposit amount as low as Rs 500  and maximum Rs.1,50,000 in one financial year. Deposits should be in multiples of Rs 50
  4. Loan can be availed between 3rd to 6th financial year
  5. Partial withdrawal facility can be availed after completion of 5 financial years
  6. Account can be extended in a block period of 5 years after maturity
  7. Deposits to Public Provident Fund (PPF) Accounts can be made in the form of cash, cheque, online funds transfer from bank Savings Account and fund transfer from other bank accounts through NEFT



 

Here are 4 lesser-known benefits of PPF:

1. Risk-free guaranteed returns: Since PPF is backed by the Indian government, it offers guaranteed, risk-free returns as well as complete capital protection.

2. PPF account extension: A PPF account matures in 15 years after which the subscriber can retain the account without making any further contribution. The balance in the account continues to earn interest till the account is closed.

3. PPF interest earnings: The interest rate on PPF deposit is not fixed. The government revises interest rates every quarter, depending on the yields of government bonds. The interest is compounded annually and credited at the end of the financial year.

4. Loan against PPF: A PPF subscriber is allowed to take a loan of his/her PPF account from the third financial year onwards. And this loan facility against the PPF account is available only till the end of the sixth financial year.