The Public Provident Fund (PPF) scheme is one of the most popular long-term savings-cum-investment schemes in India. It is an ideal option for risk-averse investors and seeking long-term capital appreciation. The PPF offers attractive interest rates and assures the security of the investment. 

There are many private and public banks such as ICICI Bank, SBI Bank, Axis Bank, etc that offer PPF facility.

What is the eligibility?

An Individual whose age is between 18 and 50 years can open a PPF with any banks. Even an individual can open a PPF account in the name of a minor also.

What is the investment limit?

The minimum investment limit is Rs 500 and a maximum of Rs 1,50,000 per year is required to be deposited in the PPF account. An individual can invest up to Rs 12,500 per month. If the mentioned limit exceeds then the individual is not eligible to earn interest or tax rebate under the Income Tax Act.

What are the tax benefits?

The great thing about a PPF is its exempt-exempt-exempt (EEE) tax status and one such investment plan in India that enjoy such an advantage. The amount you invest up to 1,50,000 is not deductible from your taxable income. The interest that you receive is also not taxable and the maturity amount after 15 years of maturity period is also tax exempt. Such benefits make the PPF as one of the tax-efficient investments. The investments in the PPF account can be claimed under Section 80C of the Income Tax (I-T) Act. An interest gained on the investment is also totally exempt. 

What is the interest rate on PPF?

The interest rate is decided by the Central government. The interest rate for the first quarter of the financial year 2019-20 is 8%. 

What is the maturity period?

The maturity period for the PPF is 15 years after which either you can withdraw the entire amount or can extend the tenure in blocks of five years. 

Partial withdrawal is possible

An individual can withdraw partially from the seventh financial year onwards. Besides, partial withdrawals, you can prematurely close your PPF account, if you need the funds for severe medical treatment or for higher education. 

Loan available

The loan can be taken between the third year and the sixth year. An individual can take a loan up to 25% of the balance available at the end of two years preceding the year in which the individual applies for the loan. The loan must be repaid within 36 months and the rate of interest is 2% higher than the interest you earn.