The PPF Account or Public Provident Fund Scheme is one of the most popular long-term savings-cum-investment products, mainly due to its combination of security, returns and tax savings.
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PPF was first introduced to the public in 1968 by the National Savings Institute of the Ministry of Finance. Since then, it has emerged as a powerful tool for creating long-term wealth for investors.
The Public Provident Fund (PPF) scheme is a long-term investment option that offers attractive interest rates and returns on the invested amount. Interest earned and returns are not taxable under income tax. Under this scheme, a PPF account has to be opened and the amount deposited during the year will be claimed under Section 80C deduction.
| Interest rate | 7.1% Per Annum |
| Minimum Investment Amount | Rs. 500 |
| Maximum Investment Amount | Rs. 1.5 Lakh Per Annum |
| Tenure | 15 Years |
| Risk Profile | Offer Guaranteed, Risk-Free Returns |
| Tax Benefit | Up to 1.5 LakhUnder Section 80C |
How to open a PPF account -
A PPF account can be opened with a post office or any nationalized bank such as State Bank of India or Punjab National Bank etc. Nowadays, even some private banks like ICICI, HDFC and Axis Bank are authorised to offer it Convenience.
You need to submit the following documents:
- An application for opening a duly filled account.
- KYC documents such as Aadhaar, Voter ID, Driving License etc.
- Residential address proof.
- Nominee declaration form.
- Passport size photograph.
- After submitting these documents, you can deposit a fixed amount for opening the account.
Importance of Public Provident Fund Account -
- PPF account is one of the best investment options for low risk individuals.
- PPF is a government-backed scheme, and investment is also not linked to the market. Because of this, it provides guaranteed returns to protect the investment needs of many people.
- Since PPF accounts ensure returns, they are used as a tool to diversify the investor's portfolio. In addition, they also provide tax-saving benefits.
- Any Indian citizen can invest in PPF.
- A citizen can have only one PPF account unless the other account is in the name of a minor.
- NRIs and HUFs are not eligible to open a PPF account. However, if there is an existing PPF account in their name, it will remain active till the date of completion. However, these accounts cannot be extended for up to 5 years in case of Indian citizens.