Public Provident Fund (PPF) is a highly favored investment option among Indians due to its numerous benefits.
Whether it’s the attractive interest rates, tax-free investments, or the maturity amount received, PPF stands out as an exceptional investment tool.
While the maturity period is set at 15 years, the advantages continue beyond this time frame. Today, we bring you three essential benefits that will make you consider investing in a PPF account.
- Withdraw the Maturity Amount
Upon maturity of your PPF account, you have the option to withdraw both the deposited amount and the accrued interest.
This is the first choice available to you. The closure of the account will result in the transfer of the entire amount to your designated bank account.
Notably, the maturity amount and interest earned will be completely tax-free. Additionally, the years you have invested in the account will be exempt from taxation.
- Extend the PPF Account
Another advantage is the option to extend your PPF account even after the initial 15-year period. You can opt for an extension in increments of five years.
It’s important to note that the extension request must be submitted one year prior to the maturity of the PPF account.
During the extension, you can withdraw money if needed, and the rules regarding premature withdrawal do not apply in this scenario.
- Continued Account Operation Without Further Investments
The third major benefit of a PPF account is that it continues to operate after maturity, even if you do not select the above two options.
It is not mandatory to invest in the account, as it will automatically be extended for another five years.
The notable advantage is that you will continue to earn interest on your balance. Additionally, you have the option to further extend the account for consecutive five-year terms.
Where Can You Open a PPF Account?
A PPF account can be opened at any government or private bank, as well as at post offices across the country.
Minors are also eligible to open PPF accounts, with parents serving as the guardians until they reach 18 years of age.
However, according to the rules set by the Finance Ministry, a Hindu Undivided Family (HUF) is not permitted to open a PPF account.
How Much Can You Expect to Earn?
Currently, PPF accounts offer an attractive interest rate of 7.1%. With this interest rate, significant wealth can be accumulated if you invest for 15 or 20 years.
