In India, for the protection of an individual's future, specially those who doe not have a job, the option of Public Provident fund is one of the best.
It is a long term investment, which the government supports with a host of tax benefits.
To me, it is a must have for any investor. So much that I would put it as the first investment in any individual's list, no matter who the individual is.
Minimum Investment: Rs 100 each time and Rs 500 for the full year
Maximum Investment: Rs. 1,50,000 per year.
Banks: SBI, Post Offices, Nationalised banks
When to Invest?: On or before the 4th of the month. After which you will get no interest for that month.
Premature Withdrawals: Upto 50% of the amount at the end of 4th year or previous year "whichever is lower" can be withdrawn after 7 years of operating the account.
80C benefits: you get tax benefits of 80C when you invest in the PPF account. You dont have to pay tax on the income for the amount that has been invested in PPF account.
Loans: A loan can be taken of upto 25% of the amount in the PPF account subject to certain conditions.
What after 15 years? If you continue the account after 15 years, the amount in your PPF account can be withdrawn. you will keep getting interest as applicable. The PPF account can be extended for 5 years each time. You can make upto 60% withdrawals from such accounts.
Historic interest rates
It is a long term investment, which the government supports with a host of tax benefits.
To me, it is a must have for any investor. So much that I would put it as the first investment in any individual's list, no matter who the individual is.
Minimum Investment: Rs 100 each time and Rs 500 for the full year
Maximum Investment: Rs. 1,50,000 per year.
Banks: SBI, Post Offices, Nationalised banks
When to Invest?: On or before the 4th of the month. After which you will get no interest for that month.
Premature Withdrawals: Upto 50% of the amount at the end of 4th year or previous year "whichever is lower" can be withdrawn after 7 years of operating the account.
80C benefits: you get tax benefits of 80C when you invest in the PPF account. You dont have to pay tax on the income for the amount that has been invested in PPF account.
Loans: A loan can be taken of upto 25% of the amount in the PPF account subject to certain conditions.
What after 15 years? If you continue the account after 15 years, the amount in your PPF account can be withdrawn. you will keep getting interest as applicable. The PPF account can be extended for 5 years each time. You can make upto 60% withdrawals from such accounts.
Historic interest rates
| Period | Interest Rate (p.a.) | |
| 01 Dec 2011 - 31 March 2012 | 8.60% | |
| 01 April 2012 - 31st March 2013 | 8.80% | |
| 01 April 2013 - 31st March 2014 | 8.70% | |
| 01 April 2014 - 31st March 2015 | 8.70% |
Comparison with Fixed Deposit?
If you have a good income, go for PPF. If your income for each year is less than 3-4 lacs and you have no savings then it is advisable over FD's
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