Post-Office Public Provident Fund

Public Provident Fund which is a long-term investment scheme by the Government of India. It is tax-exempt and risk-free savings instrument.

A Popular Tax Saving and Tax Free scheme.

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

It is a statuary scheme of Central Govt of India
The scheme is for 15 years
One deposit of Rs 500/- is compulsory in each financial year Interest is compounded annually
Interest is floating and is accrued as per prevailing rate of a particular financial year
The deposit need not be made every month
Thus it suits the convenience of the investor
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/-
Withdrawal is permissible every year from 7th financial year 50% of balance amount
Joint account is not permissible
Premature closure is not permissible unless it’s a case of death
Deposits in PPF qualify for rebate under section 80-c of Income Tax Act
The interest is totally tax free Nomination facility is available
Loan facility available from 3rd financial year
The best option for long term investments