Sep 092014

PPF stands for Public Provident Fund and is a long term saving plan. This plan is covered under government of India and is a tax saving account. PPF Account is very useful for salaried employees or businessman in order to get rebate from tax. PPF Account if operated regularly can give great benefits at the age of retirement too. What you deposited in 15 years get almost double on maturity.

Anybody who is the citizen of India either salaried or not can open the PPF Account. The subscription fee to open PPF account is Rs.100. All the selected nationalized banks are provided with the facility to open PPF Account. The deposit amount in PPF account can range from Rs. 500 to Rs. 150000.

Annual Interest paid on PPF amount is 8.7 percent and is credited to the account at the end of the financial year but is calculated monthly on the lowest balance in account between 5th and last day of the month. So in order to earn monthly interest, deposit the amount before or on the 5th day of the month. The PPF account comes under the 80C section and is non-taxable.

Initial duration of PPF account is for the term of 15 years and is further extendable for the period of 5 years in block. The maximum amount in PPF account for financial year can be deposited either in one installment or in 12 installments but not more than 12 installments. In order to keep activating the PPF account one must have to deposit the minimum amount of Rs. 500 per year.

The entire amount can be withdrawn only on the maturity. Premature withdrawal is possible but with some restrictions such as: The first withdrawal can be done from the 7th year onward and only one withdrawal is possible in a year.

For further information and calculation of PPF amount one can visit PPF Calculator site.

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