PPF (Public Provident Fund)

PPF is one of the best tax saving financial product in India. The  minimum limit is Rs.500 per annum and maximum limit of PPF is Rs.70,000 per annum which is tax free under section 80C and not only this but it also gives you 8% annual compounded returns which is best in India. Please note PPF has a long lock-in period of 15 years with intermittent partial withdrawals.

Why to open a PPF account even if you don’t need it?

• Many investors are reluctant to invest in PPF becuase has a long lock-in period of 15 years. Though it has intermittent partial withdrawals feature still it discourages many investors.
• Well, PPF is not ment for short term. Definitely PPF can't help you in near future but think long term. Think after 10-12 years. After 10-12 years, you can put your money in PPF account and in next 3-5 years it will be matured and whole the maturity amount will be tax-free and you earn compound interest of 8%.
• And it just costs Rs.500 per year for account to be active. So even if you are not going to invest lots of money in PPF right now, open the PPF accounts in name of all your family members including your minor children. So that in the future you can get this benefit.
• Open the PPF account in the name of all your family members at the interval of 2-3 years so that after 10-12 yrs , you have each PPF account maturing in a period gap of 2-3 yrs and you can use it as a investment product which gives 8% assured tax free return.

How to open PPF account in India?

• You can open PPF account with any nationalized bank as well at your local post-office branches.
• The commonest bank to open PPF account in India is SBI. Visit your nearest SBI branch, fill the PPF form and submit identity documents and submit them and get your PPF passbook. It’s that much easy.
• PPF is not for NRIs

Update on PPF : PPF to fetch better returns now?