The Public Provident Fund (PPF) is a highly favored investment option in India due to its numerous benefits.
Whether it’s the interest, tax-free status, or the maturity amount, PPF stands out as a robust investment tool.
The maturity period is 15 years, but the benefits extend even beyond this term. Here are three key advantages of PPF that make it a worthwhile investment:
1. Withdraw PPF Money on Maturity
Upon maturity of your PPF account, you have the option to withdraw the entire amount, including the accumulated interest. This is the first and most straightforward option.
The remarkable aspect of this withdrawal is that both the principal amount and the interest earned are completely tax-free. Additionally, you won’t owe any taxes for the years you were invested in the scheme.
2. Invest in PPF Even After 15 Years
The second benefit allows you to extend your PPF account beyond the initial 15-year term. You can choose to extend it in blocks of 5 years.
To do this, you must apply for the extension one year before the maturity of your current PPF account. During this extended period, you can still make withdrawals, and the pre-mature withdrawal rules do not apply.
3. PPF Account Will Continue Even Without Investment
One of the biggest advantages of a PPF account is that it continues to earn interest even if you do not make further investments after maturity.
If you don’t choose to withdraw or extend actively, your account will automatically extend by 5 years. You will continue to earn interest during this period, making it a hassle-free investment.
Opening a PPF Account
A PPF account can be opened at any government or private bank, as well as at post offices across the country.
While minors can open a PPF account, it will be managed by their parents until they turn 18. However, according to the Finance Ministry’s rules, Hindu Undivided Families (HUFs) are not allowed to open a PPF account.
Potential Returns on Investment
Currently, the PPF offers an interest rate of 7.1% per annum. Investing in PPF for 15 or 20 years can help build a significant fund.
For instance, if you invest Rs. 1,000 every month at this interest rate, you will accumulate Rs. 3,18,000 after 15 years.
PPF remains a secure and profitable investment option, providing consistent returns and multiple benefits even after the maturity period.
