Salient Features
The rate of interest is 8.60% p.a. compounded annually.
The minimum deposit is 500/- p.a
The maximum is Rs. 1,00,000/- p.a
Interest is totally tax free.
Tax saving instrument under section 80C.
Loan facility available from third year.
The Public Provident Fund Scheme is a statutory scheme of the Central Government of India.
The Scheme is for 15 years.
One deposit with a minimum amount of Rs.500/- is mandatory in each financial year.
The deposit can be in lumpsum or in convenient installments, not more than 12 installments in a year or two installments in a month, subject to total deposit of Rs.1,00,000/-.
It is not necessary to make a deposit in every month of the year.
The amount of deposit can be varied to suit the convenience of the account holders.
The account in which deposits are not made for any reason is treated as discontinued, account and such an account cannot be closed before maturity.
The discontinued account can be activated by payment of the minimum deposit of Rs.500/- with default fee of Rs.50/- for each defaulted year.
The account can be opened by an individual or a minor through the guardian.
Joint account is not permissible.
Those who are contributing to GPF Fund or EDF account can also open a PPF account.
A Power of Attorney holder can neither open nor operate a PPF account.
The grand father/mother cannot open a PPF on behalf of his/her minor grand son/daughter.
The deposits shall be in multiples of Rs.5/- subject to minimum of Rs.500/-.
The deposit in a minor account is clubbed with the deposit of the account of the guardian for the limit of Rs. 1,00,000/-.
No age is prescribed for opening a PPF account.
Interest is not contractual but the rate is notified by the Ministry of Finance, Govt. of India, at the end of each year.
The facility of first withdrawal in the 7th year of the account subject, to a limit of 50% of the amount at credit preceding three year balance.
Thereafter one withdrawal in every year is permissible.
Premature closure of a PPF Account is not permissible except in case of death.
Nominee/legal heir of PPF Account holder on death of the account holder cannot continue the account.
The account has to be closed in such case.
The account holder has an option to extend the PPF account for any period in a block of 5 years at each time.
The account holder can retain the account after maturity for any period without making any further deposits.
The balance in the account will continue to earn interest at normal rate as admissible till the account is closed.
One withdrawal in each financial year is also admissible in such account.
A PPF account can be opened either in a Post Office or in a Nationalsed Banks.
The Account is transferable from one Post Office to another and from Post Office to Bank or from a Bank to a Post office.
Account is transferable from one Bank to another bank as well as within the bank to any branch.
Deposits in PPF qualify for rebate under section 80-C of Income Tax Act.
The interest on deposits is totally tax free.
Deposits are exempt from wealth tax.
The balance amount in the PPF account is not subject to attachment under any order or decree of court in respect of any debt or liability.
Nomination facility is available.
The Best option for long term investment.
Loans can be taken from PPF account at the rate of 2.00% per year.
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