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Importance of PPF Account
Why Public Provident Fund (PPF)?
• Investing money in PPF Account at present can give you a good reward on
maturity.
• Majority of Indians cannot afford big ticket savings. By and large, we can
save small amounts every month.
• It’s a smart move to invest in schemes which would earn us good returns
and saves our taxes.
• PPF is the suitable investment which fulfills these requirements of the
ordinary Indians.
• The current PPF interest rate is 8% per annum w.e.f. April 1, 2019.
• There are tax benefits under section 80C of the Income Tax Act. The same
tax benefits apply when your PPF matures.
Where can I open my PPF Account?
The given below is the list of prominent banks:
ICICI Bank Bank of India
Allahabad Bank Oriental Bank of Commerce
SBI Bank Bank of Maharashtra
HDFC Bank Vijaya Bank
Bank of Baroda Indian Bank
IDBI Bank Dena Bank
Punjab National Bank Central Bank of India
Canara Bank Union Bank of India
More about PPF
• An investor can invest ₹ 500 - ₹ 1,50,000 in any financial year.
• Maximum tenure - 15 years.
• Investor can renewed it for 5 years each time thereafter.
• PPF has been set up with the aim of mobilizing small savings for long terms.
• PPF has fixed returns.
• The rate of interest is fixed by the Finance Ministry of the Government of India.
• The rate of interest has been almost constant since the year 2000.
No fluctuations in the interest rate.
• Every Indian can open a provident fund account in his own name. He can also open PPF
accounts in the names of each of his minor children.
• There are tax benefits under section 80C of the Income Tax Act. The same tax benefits
apply when your PPF matures.
• It is the safest investment. No market fluctuation involved.
Who qualifies for a PPF?
• All Indian citizens are eligible for PPF account.
• Each Indian can open only one PPF account for himself.
• Every Indian can open accounts for each of his minor children.
• Each minor can in effect have two PPF accounts in his name, opened
by each one of his parents and grandparents.
• NRIs cannot open PPF accounts.
• If NRIs already had an account with PPF before settling to foreign
lands, they cannot renew it after 15 years.
How to open a PPF Account?
• The first requirement is getting a form from any authorized bank and
filling it carefully. You can fill the form online also.
• Along with the form, you have to submit a copy of your Aadhaar card
and Permanent Account Number (PAN) card.
• Apart from these, you need to submit originals for verification.
• All submitted copies of documents must be self-attested. Of all these
proofs, the PAN card is the most important.
• You must also submit address proofs, which includes any one of the
Landline Telephone Bill, the Electricity Bill, the Voter ID Card and the
Passport.
Payments to PPF
• PPF interest is calculated on the basis of balance in the account on
the 5th of each month.
• Hence, if you are contributing on a monthly basis, make the payment
before the 5th of month to reap the best benefit.
• An investor is allowed to deposit up to a maximum of ₹ 1,50,000
every year.
Terminologies used in PPF Calculations
• Opening Balance: The sum in your account at the start of a year is said to
be the opening balance.
• Amount Deposited: This is the balance in your PPF account at the end of
the financial year after taking into account all the money you have
deposited.
• Interest Earned: PPF Interest is calculated on the amount in the account at
the end of a financial year.
• Closing Balance: This is calculated at the end of a financial year after
adding the interest due on the amount.
• PPF calculator: One of the easiest ways to calculate the PPF is using the
PPF calculator. There are many online calculators which aids the process of
calculating the PF.
How to Use PPF Calculator?
When you are using the PPF calculator, you need to fill the following
information:
1. Tenure: Enter the tenure, you can increase the number by a block of 5
years.
2. Payment frequency: You can choose monthly, half-yearly, quarterly or
even annually.
3. Deposit Amount: It is the amount that you will be depositing in the PPF
account.
4. Interest Rate: It is the return that you are expecting on the PPF. You can
compare the rate of interest offered by different banks and financial
institution and based on it, you can make the decision.
Facilities with PPF
• You can avail of a loan on the balance in your account after you have been
depositing in the account for 3 years.
• You can withdraw till the sixth year. After that there is embargo on withdrawals.
• The amount that you will get in hand is 25% of the total amount which was in
your account at the end of 2 years.
• E.g.: If the interest you are earning today is 8%, then the rate of interest on the
loan taken today will be 10%.
• PPF loans have to be repaid within 36 months. If the period is extended, a penal
rate of interest will be charged.
• No fresh loan is available until the earlier loan is paid off along with the interest
that accrued.
Can I transfer my PPF Account?
• Yes, you can get it transferred from your bank to a post office or vice-
versa.
• Also, as per your convenience, you can transfer the PPF Account
between different branches of the same bank.
How to withdraw from the PPF?
• You can withdraw only up to 50% after you have been contributing for
complete 6 years. This is possible only if no other withdrawals have
been made earlier.
How can PPF Account to be closed?
• The PPF Account cannot be closed within 5 years of opening your
account.
• The account will only be closed on specific grounds such as life-
threatening problems affecting the account holder or his/her spouse.
In this case, the supporting medical documents need to be produced.
Thank You!!!

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Why is ppf account important

  • 2. Why Public Provident Fund (PPF)? • Investing money in PPF Account at present can give you a good reward on maturity. • Majority of Indians cannot afford big ticket savings. By and large, we can save small amounts every month. • It’s a smart move to invest in schemes which would earn us good returns and saves our taxes. • PPF is the suitable investment which fulfills these requirements of the ordinary Indians. • The current PPF interest rate is 8% per annum w.e.f. April 1, 2019. • There are tax benefits under section 80C of the Income Tax Act. The same tax benefits apply when your PPF matures.
  • 3. Where can I open my PPF Account? The given below is the list of prominent banks: ICICI Bank Bank of India Allahabad Bank Oriental Bank of Commerce SBI Bank Bank of Maharashtra HDFC Bank Vijaya Bank Bank of Baroda Indian Bank IDBI Bank Dena Bank Punjab National Bank Central Bank of India Canara Bank Union Bank of India
  • 4. More about PPF • An investor can invest ₹ 500 - ₹ 1,50,000 in any financial year. • Maximum tenure - 15 years. • Investor can renewed it for 5 years each time thereafter. • PPF has been set up with the aim of mobilizing small savings for long terms. • PPF has fixed returns. • The rate of interest is fixed by the Finance Ministry of the Government of India. • The rate of interest has been almost constant since the year 2000. No fluctuations in the interest rate. • Every Indian can open a provident fund account in his own name. He can also open PPF accounts in the names of each of his minor children. • There are tax benefits under section 80C of the Income Tax Act. The same tax benefits apply when your PPF matures. • It is the safest investment. No market fluctuation involved.
  • 5. Who qualifies for a PPF? • All Indian citizens are eligible for PPF account. • Each Indian can open only one PPF account for himself. • Every Indian can open accounts for each of his minor children. • Each minor can in effect have two PPF accounts in his name, opened by each one of his parents and grandparents. • NRIs cannot open PPF accounts. • If NRIs already had an account with PPF before settling to foreign lands, they cannot renew it after 15 years.
  • 6. How to open a PPF Account? • The first requirement is getting a form from any authorized bank and filling it carefully. You can fill the form online also. • Along with the form, you have to submit a copy of your Aadhaar card and Permanent Account Number (PAN) card. • Apart from these, you need to submit originals for verification. • All submitted copies of documents must be self-attested. Of all these proofs, the PAN card is the most important. • You must also submit address proofs, which includes any one of the Landline Telephone Bill, the Electricity Bill, the Voter ID Card and the Passport.
  • 7. Payments to PPF • PPF interest is calculated on the basis of balance in the account on the 5th of each month. • Hence, if you are contributing on a monthly basis, make the payment before the 5th of month to reap the best benefit. • An investor is allowed to deposit up to a maximum of ₹ 1,50,000 every year.
  • 8. Terminologies used in PPF Calculations • Opening Balance: The sum in your account at the start of a year is said to be the opening balance. • Amount Deposited: This is the balance in your PPF account at the end of the financial year after taking into account all the money you have deposited. • Interest Earned: PPF Interest is calculated on the amount in the account at the end of a financial year. • Closing Balance: This is calculated at the end of a financial year after adding the interest due on the amount. • PPF calculator: One of the easiest ways to calculate the PPF is using the PPF calculator. There are many online calculators which aids the process of calculating the PF.
  • 9. How to Use PPF Calculator? When you are using the PPF calculator, you need to fill the following information: 1. Tenure: Enter the tenure, you can increase the number by a block of 5 years. 2. Payment frequency: You can choose monthly, half-yearly, quarterly or even annually. 3. Deposit Amount: It is the amount that you will be depositing in the PPF account. 4. Interest Rate: It is the return that you are expecting on the PPF. You can compare the rate of interest offered by different banks and financial institution and based on it, you can make the decision.
  • 10. Facilities with PPF • You can avail of a loan on the balance in your account after you have been depositing in the account for 3 years. • You can withdraw till the sixth year. After that there is embargo on withdrawals. • The amount that you will get in hand is 25% of the total amount which was in your account at the end of 2 years. • E.g.: If the interest you are earning today is 8%, then the rate of interest on the loan taken today will be 10%. • PPF loans have to be repaid within 36 months. If the period is extended, a penal rate of interest will be charged. • No fresh loan is available until the earlier loan is paid off along with the interest that accrued.
  • 11. Can I transfer my PPF Account? • Yes, you can get it transferred from your bank to a post office or vice- versa. • Also, as per your convenience, you can transfer the PPF Account between different branches of the same bank.
  • 12. How to withdraw from the PPF? • You can withdraw only up to 50% after you have been contributing for complete 6 years. This is possible only if no other withdrawals have been made earlier.
  • 13. How can PPF Account to be closed? • The PPF Account cannot be closed within 5 years of opening your account. • The account will only be closed on specific grounds such as life- threatening problems affecting the account holder or his/her spouse. In this case, the supporting medical documents need to be produced.