PPF Public Provident Fund Account ( PPF or Public Provident Fund Interest Rate )

PPF Public Provident Fund Account

Public Provident Fund PPF account information. (PPF or Public Provident Fund Interest Rate ).

 

This scheme was established by the Ministry of Finance, Government of India in 1968. This savings plan is tax-free and no tax is charged on interest earned in the PPF account. The amount that is deposited into PPF can be subject to tax deduction. This makes the PPF scheme one of the most tax-free savings schemes in India. This was done to encourage people to save money and to deposit it under retirement.

 

What is the Public Provident Fund (or Public Provident Fund) Account?

 

Public Provident Fund is also known as Public Provident Fund. The Ministry of Finance started it in 1968 as a savings scheme (i.e. tax saving deposit scheme). PPF’s main purpose was to encourage savings and give people tax savings. It is also a form of future deposit capital and is therefore called Public Provident Fund. A Public Provident Fund account is open at any bank branch, post office or nationalized bank. You can earn interest by depositing your money in a PPEF account for a set period.

 

PPF is a long-term investment that allows all kinds of people to deposit their money. It is provided by the government so there is no risk.

 

Seven major things about PPF Fund (PPF related information).

 

You need to be familiar with seven key points for your PPF account. These are listed below.

 

To open a PPF Account, you only need Rs.100 It is possible to invest even if you are not earning much. This application can be made in any branch of State Bank of India. This facility is available at many banks, including State Bank. PPF accounts can be opened at government banks such as Bank of India and Central Bank of India. Post offices can also accept applications. You can also open a PPF account for your child.

 

  • You can deposit minimum and maximum amounts in your PPF account. A customer must deposit Rs.500 within a year. This account can only be used to deposit Rs. 1,50,000 annually. The deposit can either be made in one lump sum or in equal installments. As per his choice, the customer can change the number of installments or the amount of each installment. Failure to deposit the annual minimum amount can result in the customer’s account being closed. The maximum annual installment limit is 12.
  • Interest is calculated for customers’ accounts from the fifth to the last day in a month. To get the maximum interest, deposit money between the 1st and 5th of each month. Under compound interest, interest is credited to customers’ accounts on 31 March each year.
  • Only the entire amount that has been deposited into the account can be withdrawn after the time limit is met. The subscriber may withdraw money from his PPF account at any time, but only up to a limit. Maximum amount allowed is 50 percent. Cash death can cause the PPF account to be closed.
  • There are certain deductions when you deposit money in a PPF account under the 80C Act. The maturity amount and interest are exempt from tax after the period ends. Wealth tax is exempted not only for interest, but also for PPF deposits.
  • PPF can also be used to finance a loan. These loans have special terms and conditions. The loan can be used between the 3rd and 6th years. The loan amount can not exceed 25% of the PPF account’s total. The loan must be repaid within 24 months. The interest rate on the loan is 2 percentage points higher than that on PPF.
  • Subscribers can keep their PPF accounts even after 15 years. This time limit is now reduced to 5-5 years. The customer will still receive interest on the amount that is deposited to the account. If money is not deposited, money can be taken out of the account. However, this facility is only available once per year.
  • A joint account cannot be established in this.

 

Also Read : Equity Funds: Everything You Need To Know

 

PPF account rules

 

Many rules have been implemented by the government under the Public Provident Fund 1958. It is important that the customer be eligible for PPF, and have the correct documents. Below, we will highlight each point.

 

Criteria for eligibility for the PPF

 

These qualifications are required in order to be eligible for this service.

 

  • One PPF account can be opened by a person. A person must be a citizen or resident of India, and over 18 years old. This is a non-exempt category.
  • This account is also open to those below 18 years old. This account can only be used to deposit Rs 1.5 lakh per year. This account cannot be opened by grandparents for their grandchildren. The guardian must be the parent of account holder.
  • This facility is not available to NRIs. However, those who have been granted the account but are not residents of the country can still use the plan for the required time. For maturity, it takes 15 years.
  • This facility is not available to HUF (Hindu Undivided Family). Since 2005, this law has been in force. All Hindu undivided family members who opened a PPF account prior to May 13, 2005, will have full maturity rights.
  •  This facility is not available to foreign nationals.

 

Also read : Top seven index funds in India Everything you need to know about index funds

Required documents to open a PPF account

 

To open a PPF account, KYC documentation is required. These documents include identification card, signature proof, and residence certificate. Below are the names of each required document.

 

  • Passport, Aadhaar Card (PAN Card), Driving License, Driving License, Voter ID and any type of utility bill, lease agreement or bank statement, ration card, check, etc. These documents are essential for a PPF account.

 

  •  Other than this, a photograph of the account holder, an application form, the name of the nominee, and any other documents required by the bank, etc. are necessary. For those below 18 years old, special documents such as birth certificate, school certificates, etc. are required.

 

PPF account opening (PPF account opened)

 

You can open this account by visiting any post office, or any government bank. You must deposit at least Rs.100 to open the account.

 

  • At a bank or post office: You can open this account by visiting any bank or post office. There you can fill out the PPF application form. Once completed, the application form can be sent along with all required documents. This work is done by banks and post offices as agents for the government.
  • Online: You can open this account online by visiting the bank’s website. Online account opening is a time-saving option. The bank’s terms and conditions can be found on their website. Many banks offer the option to link this account to other accounts. Below are some important instructions.
  • First, log on to the bank’s web portal and download the PPF application.
  • Now, collect all the documents you need and take them to the bank or post office where they will be submitted.
  • It is important that the account holder’s name appears on all documents.

 

Name of banks that offer PPF facility (PPF account opened banks)

 

PPF accounts cannot be opened at all banks. This is why there are government banks that do this work with great care. Below are the names of some banks.

 

  1. State Bank of India
  2. Bank of India
  3. State Bank of Patiala
  4. Central Bank of India
  5. ICICI Bank
  6. Union Bank of India
  7. IDBI Bank
  8. Corporation Bank
  9. Dena Bank
  10. Indian Bank
  11. Indian Overseas Bank
  12. Punjab National Bank
  13. United Bank of India
  14. UCO Bank

 

Forms for PPF

 

The government has implemented many forms for PPF. There are many forms available, ranging from Form A through H. Each form is for a different purpose. Customers can choose the form that suits them best. Here are all forms.

 

Form A (for opening a PPF account): This form is for people who are opening a PPF account for first time. This form requires the customer to provide all necessary information such as name, address and date of birth. Under 18-year-olds must provide their information, as well as that of their guardian. If the customer has an agent doing all the formal work, rather than opening the account themselves, it is mandatory that the agent’s information be included in the form.

 

Form B (For payment through Deposit or PPF of a loan): These forms can be used to deposit or withdraw money from the account. It is important to deposit money at least once a year in order to keep your account operative for a long time. It will also help to repay the loan you took with the PPF account. You can easily fill this form with the help amount cheque, PO or DD.

 

Form C: This form is used to withdraw partial funds from a PPF account. After seven years, the subscriber is allowed to make partial withdrawals from their PPF account. This Form C allows you to withdraw this amount.

 

Form D: This form is used by the customer for applying for a loan against his PPF accounts. The customer can avail the loan for three to six years after opening his account. It includes details about the customer’s PPF number, loan amount, and the applicable rate on that loan amount. The principal purpose of this loan is to be repaid in 3 years.

 

Form E: This is to add the name and address of the nominee to the PPF accounts. One PPF account can have multiple people. This form must include the name and address of the nominee, as well as details about the relationship between the nominee and the account holder. This form also lists the percentage profit of each nominee if there are more than one.

 

Form F: This is the form used to remove or modify the name of a nominee in a PPF account. This form is used to inform the account holder about the name of the nominee and the date he is to be removed, changed or transferred. Nominees can be removed or changed at any point during the tenure of a PPF account. This allows the nominee to change their profit percentage.

 

Form G: This is the form used to request funds from a nominee for a PPF bank account. The account holder must provide all information such as his profit percentage rate and other pertinent details. This form.

 

Form H: This is used to increase the maturity date. The maturity period is fifteen years. If the account holder desires, he may reduce the maturity limit by allowing for a five-year interval. It is important to include the account number as well as the date of opening the account in this form.

 

Interest rate for PPF accounts

 

This is a long-term plan. Below is the annual interest rate for some years.

 

financial year ppf account interest rate
April  2015 – March  2016 8.70%
April 2016 – September 2017 8.10%
October 2017 – March 2017 8%
April 2017 – June 2017 7.90%
July 2017 – December 2017 7.80%
January 2018 – till date 7.60%

 

Time for activation of a PPF account

 

It is important to keep your PPF account afloat by adding money every year. Each year, a minimum of Rs.500 must be contributed. The account could become inactive if this is not done every year.

 

The account holder must pay a Rs.50 penalty for reopening his account. The account holder is subject to this penalty every time his account becomes inactive. If an account holder is not able to access their account for three, four, or five years, Rs 150 will be charged for the first three months. Rs 500 will be required for each subsequent three months. For the sixth year, 1500 rupees plus 500 rupees. To avoid the penalty, total 2000 rupees must be deposited.

 

PPF account closing rules

 

PPF accounts cannot be closed prior to maturity. The money can only be withdrawn after the account has been inactive for 15 years. After 15 years have passed, the account holder may withdraw all funds in the account.

 

Recycle your PPF account

 

Even after fifteen years, account holders can renew their accounts.

 

  • The account’s interest rate will not change if you don’t invest by the due date. If the investment has not been made, the account holder can withdraw the money once per year.
  • After maturity, the new investment is added to the deposited balance after 15 years. The interest rate is then fixed on the entire amount deposited at the end. This plan allows account holders to withdraw up to 60% of their deposited amounts if they so desire.

 

Tax Benefit from PF Account (PPF Account tax-free)

 

PPF investments offer tax benefits. This is a great benefit for people who invest with their retirement in mind.

 

  • PPF comes under EEE tax.
  • Interest earned in this transaction is exempt from tax
  • There is no tax to pay even after you withdraw money from your account.
  • Your spouse’s or children’s PPF account is exempt from tax.

 

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Investment and Returns (PPF Investment Process)

 

The account holder of the Public Provident Fund account can deposit as little as Rs.500 and as much of Rs.150000. In any case, the account holder cannot deposit more that Rs.150000. The investment account holder may deposit one installment per calendar year, or up to 12 installments. Can deposit in

 

The Ministry of Finance decides the interest. It has been set at 8.70% by the current government. This interest is payable until 31 March.

 

Duration of the scheme (PPF account Duration Rules)

 

Public Provident Fund accounts are valid for 15 years. It can be extended for up to 5 years if the account holder so desires after 15 years.

 

Loan Facility (PPF Account Loan Facility):

 

The loan can be taken on a PPF account. However, the loan can only be taken by the holder after the third year of account opening. The interest rate changes at the time of loan.

 

Partial Withdrawal (PPF Account Premature Withdrawal Rules).

 

This account is locked for 15 years. However, the account holder can withdraw partial amounts as long as he needs. Pre-mature withdrawal is what the holder is allowed to do. This allows for a maximum withdrawal of 50% from the Public Provident Fund account. However, this facility is only available after the sixth year.

 

Nomination (PPF Account Nomination Facility):

 

The account can be opened by anyone, but the Public Provident Fund cannot be opened for minors. This account can be opened by one or more people. The account will be owned by the responsible account holder if the holder passes away. After the death of an account holder, the responsible account holder makes the decision. Proof of succession must be provided.

 

Main Point Information
1 Qualification Indian
2 Age Limit No
3 Enrollment Adults can open an account in their own name. But for a minor, he himself will be the account holder, but the guardian will be responsible for the account.
4 Location PPF facility is available in Post Office, Government Bank and Private Bank ICICI Bank.
5 maximum account number PPF account can be only one
6 minimum annual amount Rs 500
7 maximum annual amount  Rs 150000
8 Annual Interest Rate (from year 2018 till now) 7.6%
9 lock-in-period Minimum 15 years and then in blocks of 5 years.
10 account transfer facility Yes
11 Penalty If you contribute less than the minimum amount, then you have to pay a penalty of Rs 50.
12 Deposit Methods Cash or Demand Draft or Check as well as lump sum or maximum of 12 installments
13 partial withdrawal 50% amount at the end of 6th year
14 loan facility The holder can borrow in the third year.
15 taxation there is no tax
17 interest facility  Compound interest will be given on both principal and interest
16 tax benefit Under 80C both principal and interest will be tax/tax free

Transfer (PPF Account Transfer Procedure):

 

Public Provident Fund can also be transferred from bank to bank, post office to post office, or one branch to the other.

  • PPF Transfer Form: The holder will be provided with a form to fill out and submit to his bank.
  • The bank sends a copy along with PPF account documents and the holder’s signature to the post office.
  • After verifying the documents, other banks may agree to transfer the Public Provident Fund Account.
  • The heir to PPF can be changed if the holder so wishes. KYC documentation must also be submitted by the holder.

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