Public Provident Fund (PPF) - Eligibility Criteria, Tenure, Contribution, Advantages

Public Provident Fund

A PPF or Public Provident Fund is a tax-exempt savings scheme offered by the Government of India, wherein interest on the record is set for each quarter and is paid by the government. The relevant interest rate on PPF for the second quarter of the year, 2020-21 for example from first July to 30th September 2020 is fixed at 7.1%. The interest rate for the months of April to June 2020 was 7.1%. 

(Read about Public Provident Fund in Hindi)

Qualification Criteria 

• Any person who is an occupant of India can just open a PPF account 
• NRIs are not qualified to open PPF accounts. Be that as it may, an occupant Indian who has become an NRI subsequent to opening a PPF record can proceed with the record until development 
• Moreover, guardians/watchmen can likewise open PPF represents their minor youngsters 
• Opening of shared services and various records are not permitted 

Least and Maximum Contribution 

The base yearly contribution that can be made to a PPF account is Rs. 500 while the greatest is topped at Rs. 1.5 lakh. The most extreme limit applies to contributions made by an individual for himself and for a minor kid, both. There can be a limit of 12 contributions in a year. 

PPF Tenure 

PPF account develops after the expiry of a long time from the finish of the money related year in which the record was opened. For instance, if the PPF account was opened on Jan 1, 2010, it will develop on March 31, 2025, for example a long time from March 31, 2010. At development, you can broaden the PPF account inconclusively in squares of 5 years all at once. 

Advantages of opening a PPF Account 

• Being a Government-sponsored Scheme, the head and interest sums in your PPF account are ensured and safe 
• Contributions to the record of up to Rs 1.5 lakh per annum and interest earned on the savings are both tax-exempt 
• The interest rate for the PPF account is proclaimed by the Government each quarter. It must be noticed that PPF returns are higher than FD rates of numerous banks in that period 
• The PPF account is resistant from connection from any request or announcement of any court under the Government Savings Banks Act, 1873

Check Out : How to open a PPF (Public Provident Fund) Account