PRODUCT NOTE
Tenure: 15-YEARS
Rate of Interest: @7.10% p.a.
type OF INTEREST : Floating rate during the tenure
MODE OF CALCULATION: compounded annually but payable at maturity.
MINIMUM AMOUNT REQUIRED
Rs. 500/- in a financial year
Maximum Amount Limit
Rs. 1,50,000/- lakh in a financial year
Who can Invest
An individual
Post-Office Public Provident Fund
It is a one of most popular scheme which is not only attractive for tax saving but certainly for tax free income. There is a limit of Rs. 1,50,000/- per year and interest is on cumulative basis. The scheme is for 15 years which can be extended for 5 years. The rate of interest is on floating basis which announced on annual basis by the government. It is a recommended scheme for accumulation of wealth for the family to meet financial goals of life.
Features
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It is a statuary scheme of Central Govt of India
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The scheme is for 15 years
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One deposit of Rs 500/- is compulsory in each financial year Interest is compounded annually
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Interest is floating and is accrued as per prevailing rate of a particular financial year
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The deposit need not be made every month
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Thus it suits the convenience of the investor
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An account where the deposit is not made, is termed as discontinued account and it can’t be closed before maturity It can be reactivated by paying the minimum deposit ( Rs 500/-) and a penalty of Rs 50/-
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Withdrawal is permissible every year from 7th financial year 50% of balance amount
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Joint account is not permissible
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Premature closure is not permissible unless it’s a case of death
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Deposits in PPF qualify for rebate under section 80-c of Income Tax Act
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The interest is totally tax free Nomination facility is available
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Loan facility available from 3rd financial year
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The best option for long term investments