Investing in PPF? Do it now

Investment built out of savings has been a ‘to do’. However, searching for the best avenue is a huge challenge given the volatility of many investment plans. PPF is certainly a top choice for risk averse investors. Apart from that, it also saves you great amount of taxes. There are strong reasons for savers to also like investments into PPF. The tax free yearly interest and annual compounding are the major value points. The tenure of 15 years can be stressful at first, but compounding is much constructive than calculations. The plan for PPF is generally linked to long term goals of the individual.

The interest rates of PPF are confirmed by the Government, every quarter based on the yearly performance of the government securities. It is ever fluctuating. In 1968-69, the interest rate was set up at 4% and now in 1986-2000 it is around 12%. The current rate of interest is 7.6% per annum.

Public Provident Fund PPF is the most talked about owing to its safest form of investment. The maximum threshold for investment in one fiscal is upto 1.5 lacs and minimum of 500 to start a PPF. You are allowed to either make deposits in lumpsum or installments. This deposit helps to save tax under Section 80C. Apart from tax saving, PPF throws a volley of benefit, at an instant!

The Significant PPF Tax Benefits can be read as Under:

Withdrawing partially from PPF is certainly allowed but its starting the 7th financial year onwards. About 50% is permitted to be taken out at the end of 4th immediately preceding the year of withdrawal or the amount at the end of the preceding year, whichever is lesser.

A PPF Account is Allowed to be Carried on After Maturity

Maturity of the PPF account can be extended to an additional 15 years, which is further going to save tax. A partial withdrawal can be made doable by extending the period. These withdrawals are tax free as well.

Interest accumulated on the PPF account can be reached using the closing balance available in the account from 5th month onwards towards the last date of the month. So whatever is collected on the deposit after the 5th month onwards may go into the form of lost interest income, in every month.