Tuesday, 15 May 2018

Facts to know about PPF account | How to open PPF account with simple steps | PPF interest rates

Facts to know about PPF account | How to open PPF account with simple steps | PPF interest rates explanation | PPF tax benefits and other essential features : PPF stands for Public Provident Fund which is an investment option backed by the Government of India for long term investment related purposes. PPF account offers several benefits to the individuals as it provides safety and security along with attractive rate of interest and returns which are totally tax free. PPF account has become the first choice of investment for the investors owing to it's multipurpose benefits and facilities. Using the PPF account, both the service personnel as well as the self employed people can save their tax with other several benefits. Investors are given an opportunity to invest a minimum sum of Rs.500 and maximum Rs.1,50,000 in each financial year and can avail several facilities provided simultaneously with the PPF account. Facilities such as lending loan, anytime withdrawal as well as extension of account are given instantly with this account. The main objective of the PPF is to provide a future money saving opportunity for the salaried employees as well as the self employed  and business personnel too who are not covered under Employees Provident Fund (EPF) schemes.
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  • How to open a PPF account :

PPF accounts can be opened very easily with the help of banks or the post office functioning in the country. Any nationalized banks like the State Bank of India, Punjab National Bank etc provide the facility for the citizens to open their PPF accounts. Now-a-days, even the private banks such as ICICI Bank, Axis Bank, HDFC Bank etc are also providing the facility to open PPF account instantly by following a simple procedures. The persons who are comfortable with the post offices can easily open their PPF accounts here as well. For instantly opening the PPF accounts, the customers are required to ask for the PPF account opening form from the concerned branch. After filling up all the details and enclosing the essential enclosures such as KYC documents including address proof, identity proof, PAN, aadhaar along with a required sum of amount is also needed to get submitted along with the form for getting the PPF account instantly opened in the concerned bank.
Things to know about PPF account
Things to know about PPF account

  • Eligibility for opening PPF account :

It is essential to understand the eligibility criteria needed to open a PPF account by the citizens. PPF accounts can be opened by the Indian individuals and also the individuals on behalf of the minors. Concerned PPF account opening format is required to be filled by the concerned person and submitted along with the essential KYC documents and the required sum of amount for which the PPF account is going to be opened. Most of the nationalized as well as the private banks too now-a-days provides the facility to open PPF account with the help of internet banking facility sitting at home. Online format is provided which is required to be filled submitted for instant account opening.

  • Interest rates on PPF account :

The current rate of interest on PPF account is 7.6% and is compounded per year. Ministry of Finance, Govt. of India is authorized to set the interest rate each and every year which is frequently paid on March 31st. Rate of interest on the amount is calculated on the lowest balance between the close of the fifth day and last day of each and every month. This attractive rate of interest along with other benefits including the tax savings etc attracts the customers to open the PPF account and avail the maximum financial benefits.
PPF account
Worth to know about PPF account opening

  • Essential features of PPF account :

  1. Eye catching and very attractive interest of 7.6% which is completely exempted from the income tax under section 80C.
  2. Investment using PPF account can be done for a minimum period of 15 years. However, it can be extended in separate blocks of 5 years as per our desire. 
  3. Amount of deposit for opening the PPF account has been kept as low as Rs.500 for one financial year. However, the maximum sum of amount in one financial year is Rs.1,50,000.
  4. Easy deposit facility has been provided along with the PPF account which can be done in maximum 12 number of transactions. 
  5. Loans can also easily be taken on behalf of the opened PPF account in between the 3rd to 6th financial year.
  6. From the 7th financial year onwards, the partial withdrawal facility can also easily be availed.
  7. Deposit frequency needs to be maintained per financial year for a period of 15 years.
  8. Mode of deposit into the PPF account is extremely simple and the amounts can be deposited into the PPF account by means of either cash, cheque, demand draft or online fund transfers.
  9. Nomination facility has also been given for the PPF account holder. Any PPF account holder can easily designate a nominee either during opening up of the PPF account or in between the period. 
  10. Unlike mutual funds, no any kind of risk is associated with the PPF account holder as the same is backed by the guidelines provided by the Indian Government which offers guaranteed return and complete safety of the capital amount.  
  11. Joint account opening facility is provided with PPF accounts. It can easily be opened for the benefits of  a single individual only.
  12. Any one Indian citizen can have only one PPF account until and unless the second is a minor. NRIs are also not entitled to open a PPF account.  

  • Procedure of amount/fund withdrawal from the PPF account :

PPF account can only be closed after the maturity period i.e. after completion of a period of 15 years from the date of opening up of the PPF account. However, after completion of a period of 15 years, the entire amount can be withdrawn easily and the PPF account can be closed by the concerned individual. The scheme provides a facility to partially withdraw the funds in case of any necessity after successful completion of a period of 6 six years i.e. from 7th year onwards. A maximum of 50% of the amount can be withdrawn by the account holder at the end of the 4th year preceding the year in which the amount is withdrawn or even at the last or the end of the preceding year keeping in view the lower one. More withdrawals can be done only once in any financial year. 

  • Tax benefits concerned with the PPF account :

PPF account offers us a great tax benefit under section 80C of the income tax. Even the accumulated sum of amounts as well as the interest would also be exempted from the income tax during the time of maturity and withdrawal of the amounts linked with the PPF account. PPF accounts are therefore considered the first choice by the investors following the several benefits and guaranteed return policies.

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