Outlook Money
PPF is a government-backed long-term savings scheme introduced in 1968 to provide guaranteed returns to small investors.
It is transparent, as the subscriber can check details like account deposits, KYC, etc., and is monitored by the government.
Any Indian citizen can open a PPF account with no maximum age limit. These accounts can also be opened for minors. A PPF account is for 15 years; after that, it can be extended in blocks of five years.
The interest rate on PPF deposits is reviewed periodically and is currently 7.1%, which remained the same since April 4, 2020.
Depositors can claim tax deductions up to Rs 1.5 lakh in a financial year under Section 80C of the Income-tax Act, 1961. The minimum deposit amount is Rs 500. The interest earned is tax-free.
Loans against PPF can be availed after 5 years, and partial withdrawals are allowed after the 7th year, subject to conditions.
Premature account closure is permitted under certain conditions, like life-threatening illnesses, education, or change of residence.
It is among the most popular small savings schemes across age groups, offering guaranteed returns, ideal for long-term wealth creation.
Compiled By Himani Verma