Public Provident Fund : A summarized view
Public
provident fund (PPF) is one of the best tax saving investment option under
section 80C in the point of view safety. However, it does not guarantee to
build a great wealth but it offer a great sense of safety with capital appreciation.
Many of investors often confused between EPF(Employee Provident Fund) and PPF.
Today, we will understand about PPF investment. The main feature of PPF as
given below:
- · Only Indian citizen can open PPF account. No NRI and foreigners are allowed to open this account. If anyone get NRI status after opening the PPF account then he/she can be continue with it.
- · It can be opened in the name of single name. Joint names are not allowed. Parent can open this account in the name of minor but the total tax exempt limit would be Rs 1 lakh only including parent’s investment.
- · The minimum amount needed Rs 500 every year to maintain it. The investor can deposit maximum 12 times in a financial year.
- · The return is flexible but sure and it decided by RBI every year. For 2013-14 the rate of return is 8.7% per annum. It is the safest investment backed by government of India. It cannot be attached under any court order for debt recovery.
- · You get tax benefit under section 80C on invested amount subject to upper limit Rs 1 lakh. The return is also tax free.
- · It has 15 year lock-in period. After completion of 15 year one can extend it by 5 year block period. It allowed partial withdrawal facility after completion of 5 year after opening the account. The loan facility is also available in PPF.
- · The PPF account can be opened in post office, SBI branches. Now some private banks like ICICI bank are also offering such services. If you move your residence from one place to another, in that case you can easily shift it to nearest bank or post office.
It is great tool to accumulate
wealth in long term with higher degree of safety. For more detail and any other
query related investment, you can contact me through my email.
Warm regards,
Arvind Trivedi
Certified
Financial Planner
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