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FAQ: Public provident fund india?

The Public Provident Fund is a savings-cum-tax-saving instrument in India, introduced by the National Savings Institute of the Ministry of Finance in 1968. The aim of the scheme is to mobilize small savings by offering an investment with reasonable returns combined with income tax benefits. The scheme is fully guaranteed by the Central Government.

What is PPF account and its benefits?

Public Provident Fund ( PPF ) is one of the most popular long-term saving schemes which focuses on inducing small savings like investments and accrue returns on the same. As a saving scheme by the government, PPF gives an agreeable rate of interest and returns on investments.

How much I will get in PPF after 15 years?

PPF Calculation for investment periods of:

Investment Period Total PPF Investment Total Interest Earned
15 years Rs. 1.5 lakh Rs. 1.4 lakh
20 years Rs. 2 lakh Rs. 2.88 lakh
30 years Rs. 3 lakh Rs. 9 lakh
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Which bank is best for PPF account?

A PPF account can be opened in only designated bank branches of SBI and its subsidiaries, ICICI Bank, Axis Bank. Other banks where you can open a PPF account include: HDFC Bank, Central Bank of India, Bank of India ( BOI ), IDBI, Central Bank of India, Punjab National Bank, Indian Overseas Bank, and few others.

What is the interest rate on PPF account?

The current interest rate on PPF is 7.1% compounded annually. PPF is backed by the government of India and the risk involved is very minimal and it offers guaranteed risk-free returns. Also, it falls under EEE status which means that the amount invested, interest earned and maturity amount received are all tax-free.

Can I withdraw PPF after 5 years?

Yes, you can make partial withdrawals from your PPF account after five years. However, the maximum amount you can withdraw is capped at the lower of the two – 50% of the balance at the end of the fourth financial year or 50% of the balance at the end of the preceding year.

Is PPF better than LIC?

The Public Provident Fund tends to provide a far superior rate of returns compared to an LIC policy like Jeevan Anand. What you should do is invest in the PPF and take a term policy online, which is cheaper and faster. In the term policy you do not get your money back, but, you are provided with solid insurance.

Can I have 2 PPF accounts?

A person can not open more than one PPF account in his / her name, as per PPF regulations. In case you have two PPF accounts the second would be regarded as invalid since it is not authorized under the regulations. And because of its lock-in period of 15 years, you also can not close the second PPF account if any.

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Which is better PPF or FD?

FD is comparatively more liquid an option when compared to PPF. In case one wants low-risk investment with decent returns along with the option to prematurely close the account, FD is much better an option.

Can I invest more than 1.5 lakhs in PPF?

Flexible Investment You can invest up to a maximum of 1.5 lakh per annum towards your PPF account. The best part is that you can deposit the money in 12 instalments. The minimum amount that you can invest in their PPF account is as low as Rs. 500.

Is PPF interest same in all banks?

PPF is a government-run scheme; thus, the rate of interest is the same in all banks for PPF.

Is PPF a good investment?

PPF is a risk-free investment and is guaranteed by the Indian Government. It is a government-backed safe savings avenue. The money deposited in a PPF account is utilised by the Government for its budgetary purposes and interest is deposited by the Government as well. There is hence less risk of default in case of PPF.

How is PPF maturity amount calculated?

Suppose, an individual pays an annual amount of Rs. 2,00,000 in their PPF investment for a period of 15 years at an interest rate of 7% then his/her maturity sum at the closing year will be equal to 5763698. F = P [({(1+i) ^n}-1)/i]

I Rate of interest
F Maturity of PPF
N Total number of years
P Annual instalments

What is the minimum lock in period for PPF account?

The minimum lock-in period of PPF is 15 years, and the money can be withdrawn in full after its maturity period. However, individuals are provided with the options of premature withdrawals, which can be made from the start of the seventh financial year.

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What is the age limit for PPF account?

What is the minimum age for opening a PPF account? There is no restriction on the age limit to open a PPF account of a minor. However, a PPF account of a minor can only be handled by a parent/guardian on his/her behalf until the account holder turns 18.

What happens after 15 years of PPF account?

Close the PPF account after 15 years: This is as simple as it sounds. Once the initial block of 15 years is over, you can close the account and get the full PPF kitty tax-free. Extend the PPF account by five years without further contributions: This option allows you to extend your account maturity by 5 years.

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