Public Provident Fund News: For the good future of the children, all the parents keep planning continuously. There are many schemes, private and government, for the good future of the children. One of these is the Public Provident Fund. PPF is one of the most popular savings schemes in India. The tenure of PPF is 15 years. It can also be extended for five years.
Public Provident Fund is a central government scheme, so the money invested in it is completely safe and returns are also guaranteed. Investing small savings in Public Provident Fund can yield returns on the same. This plan can also be used for retirement. You can also open a PPF account for your child and collect funds for his future. To open a PPF account at an early age, the PPF account must have matured or will be near maturity by the time the child grows up.
Benefits of PPF account for children
The maturity of the Public Provident Fund account is 15. If the money is deposited for 15 years, the interest gets accumulated in the principal amount and then interest is earned on it. In this way a good amount gets deposited in the account. If you open a child’s PPF account at the age of 5, then when he turns 20, then a good amount can be deposited for his higher education. PPF account can be extended further for 5 years.
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The interest rate for PPF is determined by the government every quarter. Currently, the interest rate of PPF is 7.1 percent. Interest rates are announced by the government every quarter. The interest amount is calculated on the lowest balance after the 5th of every month, till the last day of the month. Therefore, PPF investors are advised to deposit money in their account before the 5th of every month.
Start saving with Rs.500
Investment in PPF account can be started with a minimum of Rs 500. One can deposit a maximum of Rs 1.5 lakh in a year. Money keeps getting deposited in this account, along with, the benefit of tax exemption is also available.
Exemption on PPF account comes under EEE category. This means that the year in which the investment is made in PPF will get tax exemption under section 80C of Income Tax. Along with the investment amount, there will be no tax on the interest earned on PPF. Loan can also be taken against the amount deposited in PPF account. Loan can be taken only between the beginning of the third year and the end of the sixth year from the date of account opening.
Tags: investment tips, PPF account, Public Provident Fund, Small Savings Schemes
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