6 PPF Account Benefits – Advantages of Investing in PPF | AU Small Finance Bank
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Advantages of Investing in a PPF Account

    Public Provident Fund (PPF) is one of the most popular long-term saving schemes. A government-guaranteed investment option, PPF focuses on inducing small savings like investments that offer decent returns coupled with income tax benefits.
    Basic Features
    • Individuals can open a PPF Account at banks or at post offices.
    • One can open a PPF account with a minimum contribution of Rs. 500 per year and a maximum of Rs. 1.5 lakh in a financial year.
    • An individual can open only one account under his/her name.
    • PPF payments can be made in the form of demand draft, cheque, cash, or via online transfer.
    PPF Account benefits
    The key benefits of a PPF account are listed below:
    • Low Risk
    A public provident fund scheme is ideal for individuals who are reluctant to take any risks. Since this plan is backed by the government it offers guaranteed returns. Moreover, invested funds in the PPF account are not market-linked.
    • Tax Benefits
    Public Provident Fund provides tax benefits under Section 80C of the IT Act, 1961. Therefore, the entire amount redeemed from a PPF Account upon completion of maturity is not subject to taxation. However, it should be kept in mind that the total principal that can be invested in one financial year cannot exceed Rs. 1.5 Lakh.
    • Tenure Extension
    The scheme has a tenure of 15 years for the subscribers. When the PPF account matures after 15 years, subscribers have two options – withdraw the entire amount or extend the tenure in blocks of five years.
    • Liquidity with Partial Withdrawal
    From the 7th year, you can make partial withdrawals from your PPF account. You also have the option to prematurely close your PPF account if incase you need the funds for severe medical treatment or for higher education.
    • Loan Facilities
    PPF loans can be availed against the account, amidst the 3rd and 6th financial year (from the date of account opening). Only 25% or less of the total amount available in the account can be claimed for this purpose. You need to repay the loan in 36 months.
    • Easy to Operate
    You can open a PPF Account online from your home or office. Just fill the application form online and submit it to the bank along with your KYC documents. The first deposit to open the PPF account can also be paid online along with the application.
    Public Provident Fund (PPF) is the most preferred fixed income, tax-saving investment option for long-term goals like retirement. Convenient and a safe form of savings – its own set of features/benefits make it a lucrative option for most investors.
    It is always advisable to invest in the PPF at the beginning of the year. Doing so will help you earn maximum interest on the deposits for the entire year.