What is ppf?

PPF stands for Public Provident Fund, which is a popular long-term investment option in India. It is a government-backed savings scheme that offers tax benefits and a guaranteed return on investment.

Here are some key features of PPF:

  1. Tax Benefits: Contributions made to a PPF account are eligible for tax deductions under Section 80C of the Income Tax Act, up to a maximum limit of Rs. 1.5 lakh per financial year.

  2. Interest Rate: The interest rate on PPF is set by the government and is currently 7.1% per annum. The interest is compounded annually.

  3. Tenure: The maturity period of a PPF account is 15 years, and it can be extended in blocks of 5 years indefinitely.

  4. Investment Limits: The minimum amount required to open a PPF account is Rs. 500, and the maximum amount that can be invested in a financial year is Rs. 1.5 lakh.

  5. Withdrawals: Partial withdrawals are allowed from the 7th year onwards, and the entire amount can be withdrawn at the end of the maturity period.

  6. Account Benefits: PPF accounts can be opened at designated post offices and banks, and they offer the dual benefit of savings and tax savings.

Overall, PPF is a safe and attractive investment option for individuals looking to build long-term savings while also enjoying tax benefits.