- News>
- Personal Finance
THIS Post Office Scheme will provide 7.1% returns: Here`s what you need to know
The PPF account can be used to accumulate wealth over time.
Highlights
- The PPF account can be used to accumulate wealth over time.
- After the completion of 15 years from the inception of the account, the PPF account matures.
- PPF account users can extend their accounts in 5-year increments after they reach maturity.
New Delhi: The Public Provident Fund is a long-term investment option that is backed by the government. PPF returns are not only generally greater than FD returns, but they also come with a slew of other advantages for the average person. The PPF account can be used to accumulate wealth over time. Individuals who are not protected by the Employees Provident Fund (EPF) might use PPF to plan for their long-term retirement.
PPF Maturity, Closing/Withdrawal Rules
After the completion of 15 years from the inception of the account, the PPF account matures. PPF account users can extend their accounts in 5-year increments after they reach maturity.
It is generally not advisable to close a PPF account before it has been open for 15 years. However, you can terminate your PPF account early after five years if you need it for a specific reason, such as medical treatment or children's further education.
After the seventh year, just one withdrawal per year is permitted. The maximum withdrawal, however, is limited to 50% of the balance at the end of the fourth year or the previous year, whichever is lower.
Interest Rates, Minimum Deposit and Tax
As stipulated by the RBI, a PPF account will earn 7.1 percent per year (compounded annually), and you will get the total interest amount at the end of each fiscal year. You can deposit money into a PPF account at any time during the year, but you must keep a minimum balance of Rs. 500 and a maximum amount of Rs. 1,50,000 in a fiscal year. If a minimum of Rs. 500 is not deposited in a fiscal year, the PPF account will be closed.
You can deposit cash, check, or pay online in one big sum or in instalments, depending on your convenience. The deposits will be tax-deductible under Section 80C of the Internal Revenue Code, and the term or lump sum interest will be tax-free, making it a profitable investment.
Post Office PPF: Online Transaction
India Post Payment Bank allows Post Office account holders to do basic banking operations. IPPB allows users to check their balance, transfer money, and perform other financial transactions that formerly required a trip to the post office.
#mute