Public Provident Fund

Popular Saving Scheme

Public Provident Fund is popularly known as a PPF is a saving scheme of the Government of India. It is an excellent scheme for the people who are working in an unorganized sector. It provides interest rates of 8% per annum. Interest earned by the PPF is tax free. If one contributes up to 1.5 lakh per annum it is tax free. The legal aspect of Provident Fund is that it is immune from attachment from any order of the court etc.

Where and How to open?

Public Provident Fund Account can be opened in a nationalize or a private bank, that is authorized to do so. Even with the changing scenario, it can be opened online through net banking. Form A of Provident Fund account can be downloaded online. Some private sector banks like HDFC and ICICC etc are also authorized to open PPF account. It can also be opened in a post office.

Who can open?

A person should be a resident of India. Minor’s account also can be opened by the parents. PPF account also can be opened jointly.  One person cannot open more than one account in his/her name.

How much money

PPF account can be opened by the person with a small amount of Rs.100. However, minimum of Rs.500 must be deposited in a financial year.  Maximum limit is 1, 50,000/-

Premature closure

PPF account can be prematurely closed on the grounds of serious ailment or threatening disease of the account holder, spouse or dependent children or parent. Policy holder is required to produce supporting document from medical authority.

Period

Provident fund account matures after 15 years from the date of buying it.  It can be further extended.

Loan on PPF

Loan can be taken against the PPF account. It can be taken from the third financial year up to sixth financial year from the date of opening of account. Loan amount should not be acceded by 25% amount of the deposited sum.

Nomination:  By filling Form E one can nominate a person of his or her choice as a nominee, who will be the ultimate beneficiary.

Transfer

Provident fund account can be transferred from bank to post office or vice versa.