What is PPF and it's Benfits?
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What is PPF and it's Benfits?
PPF, or Public Provident Fund, is a popular savings scheme in India that offers a range of benefits to investors. Here are some of the key benefits of investing in PPF:
Guaranteed returns: PPF offers a guaranteed return, which is currently set at 7.1% per annum. This makes it a low-risk investment option for those who are looking for a steady return on their savings.
Tax benefits: Contributions to PPF are eligible for tax deductions under Section 80C of the Income Tax Act, up to a maximum of Rs. 1.5 lakh per year. The interest earned on the investment and the maturity amount are also tax-free.
Long-term investment: PPF has a long-term investment horizon of 15 years, which encourages investors to save regularly and build a significant corpus over time. Investors can also extend the investment period for a block of 5 years after maturity.
Flexible investment options: Investors can choose to invest in PPF through various modes, such as lump sum or in installments, making it a flexible investment option.
Low minimum investment: PPF has a low minimum investment amount of Rs. 500 and maximum Rs. 150000 in financial year, making it accessible to a wide range of investors.
Loan facility: Investors can also avail of a loan against their PPF account after the third financial year from the date of account opening.
Overall, PPF is a reliable and popular savings option that offers a range of benefits to investors. However, it is important to note that PPF has certain restrictions and limitations, such as a cap on the maximum investment amount, which investors should be aware of before making an investment decision.
Guaranteed returns: PPF offers a guaranteed return, which is currently set at 7.1% per annum. This makes it a low-risk investment option for those who are looking for a steady return on their savings.
Tax benefits: Contributions to PPF are eligible for tax deductions under Section 80C of the Income Tax Act, up to a maximum of Rs. 1.5 lakh per year. The interest earned on the investment and the maturity amount are also tax-free.
Long-term investment: PPF has a long-term investment horizon of 15 years, which encourages investors to save regularly and build a significant corpus over time. Investors can also extend the investment period for a block of 5 years after maturity.
Flexible investment options: Investors can choose to invest in PPF through various modes, such as lump sum or in installments, making it a flexible investment option.
Low minimum investment: PPF has a low minimum investment amount of Rs. 500 and maximum Rs. 150000 in financial year, making it accessible to a wide range of investors.
Loan facility: Investors can also avail of a loan against their PPF account after the third financial year from the date of account opening.
Overall, PPF is a reliable and popular savings option that offers a range of benefits to investors. However, it is important to note that PPF has certain restrictions and limitations, such as a cap on the maximum investment amount, which investors should be aware of before making an investment decision.
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