PPF Update: Here’s how to open PPF account; check eligibility, interest and more

New Delhi: PPF, or Public Provident Fund, is one of India's most popular long-term investing options. It is an Indian government-sponsored retirement savings plan designed to help people build long-term wealth once they retire. PPF, which was first introduced in 1968 by the Ministry of Finance's National Savings Institute, has grown into a strong tool for Indians seeking tax benefits. Because of its safety, profits, and tax advantages, the program has become one of the most popular investment options.

This government-backed scheme is a type of small savings policy that guarantees guaranteed returns at maturity, which is why it is so popular among investors.

Individuals can contribute as little as Rs 500 per year and as much as Rs 1,50,000 per year in their PPF accounts, making it a very flexible investment vehicle. One of the reasons why Indians are so eager to participate in this fund is because of this.

PPF has a number of advantages in addition to its flexibility. First and foremost, because the fund is backed by the Indian government, it is a risk-free investment that does not fluctuate with stock exchange prices from day to day.

It also serves as a means for an account holder to obtain a loan in the event of an emergency at a nominal interest rate of only 1% per year. However, this benefit is only available from the third to sixth year after starting a PPF account. The account holder can withdraw money from the PPF after six years.

Despite the fact that PPF has a 15-year initial term, the investor can extend the term of his or her account for as long as he or she needs. This can be done in five-year increments by filling out a PPF Account Extension Form.

PPF investors are also eligible for interest on interest, which produces higher returns because it is a long-term investment plan.

Tax benefits of PPF

The Public Provident Fund is one of the few investment alternatives that benefits from the government's triple tax exemptions, also known as the EEE status. This means that a PPF account user is eligible for tax breaks three times: when they invest when they accrue, and when they withdraw. This means that you can get a tax deduction of up to Rs 1.5 lakh on your annual investment. The interest rate earned each year is likewise exempt from any levy under Section 80C of the Income-tax Act of 1961, and the matured amount can be withdrawn without being taxed.

The PPF's interest rate, which is currently maintained at 7.1 percent, is one of the highest among government-backed fixed income instruments.

How to open PPF account online

PPF accounts can be opened either online or in person at a bank. To open a PPF account online, you must first log into your bank's net banking interface. He or she should be able to locate an option that permits them to open a PPF account there. Then, in order to proceed, all details, including those of the bank and nominee, must be filled in and verified. After that, the account holder must input the amount of money he or she wants to put into the fund. To finish the creation of the PPF account, the person will be provided an OTP or requested for a transaction password, depending on the bank.