New Delhi: The Public Provident Fund (PPF) is one of India’s most popular government-backed savings schemes. It offers investors a safe, low-risk, and tax-efficient option to build long-term wealth with steady returns. Designed for people who prefer minimal intervention in their investments, a PPF account provides a reliable alternative to conventional savings options.
Launched by the Ministry of Finance to mobilise household savings, the PPF allows citizens to move funds from low-yield bank deposits into a government-supported scheme with reasonable returns. The current interest rate on PPF stands at 7.1 percent per annum, compounded annually. As a government-backed product, its interest rate is reviewed and announced every quarter but remains fixed during the ongoing quarter.
5 Lesser-Known Facts About PPF
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1. Flexible Tenure Beyond 15 Years:
The PPF has a minimum lock-in of 15 years but can be extended in blocks of five years indefinitely. Account holders can continue their investment without withdrawing funds at maturity.
2. Partial Withdrawals After 7 Years:
Though the scheme’s tenure is 15 years, partial withdrawals are allowed after the seventh year. Investors can withdraw a portion of their balance to meet financial needs without closing the account.
3. Loan Facility Against PPF:
Investors can take a loan against their PPF corpus before completing six years of investment. The loan amount is limited to 25 percent of the account balance two years before applying, and it must be repaid within 36 months.
4. Protection From Creditors:
As per a Gujarat High Court ruling, the funds in a PPF account cannot be attached for debt recovery or liability defaults, making it a secure investment.
5. Investment Cap of Rs 1.5 Lakh Per Year:
Investors can deposit a minimum of Rs 500 and a maximum of Rs 1.5 lakh per year to earn interest and tax benefits. Deposits beyond Rs 1.5 lakh are allowed but will not earn interest or tax rebates.
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