Why is PPF Account important?

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Importance of PPF Account
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Why Public Provident Fund (PPF)?

• Investing money in PPF Account at present can
  give you a good reward on maturity.
• Majority of Indians cannot afford big ticket
  savings. By and large, we can save small amounts
  every month.
• Its a smart move to invest in schemes which
  would earn us good returns and saves our taxes.
• PPF is the suitable investment which fulfills
  these requirements of the ordinary Indians.
• The current PPF interest rate is 8 per annum
  w.e.f. April 1, 2019.
• There are tax benefits under section 80C of the
  Income Tax Act. The same tax benefits apply when
  your PPF matures.

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Where can I open my PPF Account?

• The given below is the list of prominent banks

ICICI Bank Bank of India
Allahabad Bank Oriental Bank of Commerce
SBI Bank Bank of Maharashtra
HDFC Bank Vijaya Bank
Bank of Baroda Indian Bank
IDBI Bank Dena Bank
Punjab National Bank Central Bank of India
Canara Bank Union Bank of India
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More about PPF

• An investor can invest ? 500 - ? 1,50,000 in any
  financial year.
• Maximum tenure - 15 years.
• Investor can renewed it for 5 years each time
  thereafter.
• PPF has been set up with the aim of mobilizing
  small savings for long terms.
• PPF has fixed returns.
• The rate of interest is fixed by the Finance
  Ministry of the Government of India.
• The rate of interest has been almost constant
  since the year 2000. No fluctuations in the
  interest rate.
• Every Indian can open a provident fund account in
  his own name. He can also open PPF accounts in
  the names of each of his minor children.
• There are tax benefits under section 80C of the
  Income Tax Act. The same tax benefits apply when
  your PPF matures.
• It is the safest investment. No market
  fluctuation involved.

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Who qualifies for a PPF?

• All Indian citizens are eligible for PPF account.
• Each Indian can open only one PPF account for
  himself.
• Every Indian can open accounts for each of his
  minor children.
• Each minor can in effect have two PPF accounts in
  his name, opened by each one of his parents and
  grandparents.
• NRIs cannot open PPF accounts.
• If NRIs already had an account with PPF before
  settling to foreign lands, they cannot renew it
  after 15 years.

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How to open a PPF Account?

• The first requirement is getting a form from any
  authorized bank and filling it carefully. You can
  fill the form online also.
• Along with the form, you have to submit a copy of
  your Aadhaar card and Permanent Account Number
  (PAN) card.
• Apart from these, you need to submit originals
  for verification.
• All submitted copies of documents must be
  self-attested. Of all these proofs, the PAN card
  is the most important.
• You must also submit address proofs, which
  includes any one of the Landline Telephone Bill,
  the Electricity Bill, the Voter ID Card and the
  Passport.

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Payments to PPF

• PPF interest is calculated on the basis of
  balance in the account on the 5th of each month.
• Hence, if you are contributing on a monthly
  basis, make the payment before the 5th of month
  to reap the best benefit.
• An investor is allowed to deposit up to a maximum
  of ? 1,50,000 every year.

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Terminologies used in PPF Calculations

• Opening Balance The sum in your account at the
  start of a year is said to be the opening
  balance.
• Amount Deposited This is the balance in your PPF
  account at the end of the financial year after
  taking into account all the money you have
  deposited.
• Interest Earned PPF Interest is calculated on
  the amount in the account at the end of a
  financial year.
• Closing Balance This is calculated at the end of
  a financial year after adding the interest due on
  the amount.
• PPF calculator One of the easiest ways to
  calculate the PPF is using the PPF calculator.
  There are many online calculators which aids the
  process of calculating the PF.

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How to Use PPF Calculator?

• When you are using the PPF calculator, you need
  to fill the following information
• Tenure Enter the tenure, you can increase the
  number by a block of 5 years.
• Payment frequency You can choose monthly,
  half-yearly, quarterly or even annually.
• Deposit Amount It is the amount that you will be
  depositing in the PPF account.
• Interest Rate It is the return that you are
  expecting on the PPF. You can compare the rate of
  interest offered by different banks and financial
  institution and based on it, you can make the
  decision.

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Facilities with PPF

• You can avail of a loan on the balance in your
  account after you have been depositing in the
  account for 3 years.
• You can withdraw till the sixth year. After that
  there is embargo on withdrawals.
• The amount that you will get in hand is 25 of
  the total amount which was in your account at the
  end of 2 years.
• E.g. If the interest you are earning today is
  8, then the rate of interest on the loan taken
  today will be 10.
• PPF loans have to be repaid within 36 months. If
  the period is extended, a penal rate of interest
  will be charged.
• No fresh loan is available until the earlier loan
  is paid off along with the interest that accrued.

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Can I transfer my PPF Account?

• Yes, you can get it transferred from your bank to
  a post office or vice-versa.
• Also, as per your convenience, you can transfer
  the PPF Account between different branches of the
  same bank.

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How to withdraw from the PPF?

• You can withdraw only up to 50 after you have
  been contributing for complete 6 years. This is
  possible only if no other withdrawals have been
  made earlier.

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How can PPF Account to be closed?

• The PPF Account cannot be closed within 5 years
  of opening your account.
• The account will only be closed on specific
  grounds such as life-threatening problems
  affecting the account holder or his/her spouse.
  In this case, the supporting medical documents
  need to be produced.

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Thank You!!!