PPF Scheme: Understand these 5 rules of Public Provident Fund before opening an account..
PPF Investment: The Public Provident Fund is a great saving option. But, to invest in it, you must know all its rules. For example, how much interest is available in it. How much can you start investing? How will you get the benefit of compound interest on investment? Also, which form is required for opening and what are the conditions for taking a loan? The government operates the Small Savings Scheme. Meaning it is a government-guaranteed investment. In such a situation, there is no risk and the interest rate is reviewed every quarter. The government also changes the rules related to it many times. Let's know what are the new rules of PPF...
Form-1 to open a PPF account
For opening a PPF account, Form-1 has to be submitted instead of Form-A. For extension of the PPF account after 15 years (with deposit), one year before maturity, one has to apply in Form-4 instead of Form H.
How much loan will be available on PPF?
If you want to take a loan on a PPF account, then you can take a loan only on 25% of the balance present in the account two years before the date of application. In simple language, you can understand it like this you applied for a loan on 31 March 2022. If there was Rs 1 lakh in the PPF account two years ago (on 31 March 2020), then you can get a loan of 25% of it i.e. 25 thousand.
PPF: What will be the interest rate of the loan?
If you take a loan on the balance present in the PPF account, then the interest rate has been reduced from 2% to 1%. After paying the principal amount of the loan, interest will have to be paid in more than two installments. Interest is calculated from the first date of every month.
What will happen to the PPF account after 15 years?
If you are not interested in investing after investing for 15 years, then you can continue your PPF account without investing after this time limit. After 15 years, you are not obliged to deposit money. If you are choosing the option of extending the PPF account after maturity, then you can withdraw money only once in a financial year.
PPF: How many times can you deposit in a month?
Investment in a Public Provident Fund account must be in multiples of Rs 50. This amount must be at least Rs 500 or more annually. But you can deposit up to Rs 1.5 lakh in a PPF account in a whole year. You get the benefit of tax exemption on this. You can deposit money in a PPF account only once a month.
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