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Top 10 reasons for investing in Public Provident Fund Scheme

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Public Provident Fund or PPF scheme is a very attractive fixed income investment option for small investors because of its low risk and high return compare to other investment options available in market.

Here are the top ten reasons for investing in a public provident fund scheme or PPF account;

  1. Public Provident Fund or PPF offers attractive interest rate of 8.7% per annum which is a very good investment at present compare to other investment plan offered by government or non-government agencies.
  2. Through investing in Public provident Fund or PPF, you can avail up to a maximum of Rs. 1, 50,000 as income tax deduction under section 80C of income tax act, 1961. Budget 2014 has introduced this new limit of Rs. 150000 for tax deduction to replace the earlier tax deduction of Rs 100000.
  3. Public Provident Fund is a good long term investment plan which can be withdrawn after a period of 15 years. So an investor can keep accumulating money through this account for any long term reason like children’s education or marriage.
  4. You can invest as low as Rs. 500 or you can go up to a maximum amount of Rs. 1,50, 000 in this account.  Budget 2014 has introduced this new maximum limit of investment in Public Provident Fund scheme as Rs.150000.
  5. You can open public provident fund account in the name of any members of your family and claim income tax exemption on that.
  6. The balance amount in your Public Provident Fund or PPF Account is not subject to attachment under any order or decree of court in respect of any debt or liability.
  7. Nomination facility is available by which you can provide your parents or spouse’s name as a nominee to avail the balance amount in your Public Provident Fund Account in case of your death.
  8. Your public provident fund or PPF Account can be transferred from One Post Office to Another post office or from post office to an authorized bank or from any authorized bank to post office.
  9. The investor can retain the public provident fund or PPF Account after the maturity of 15 years for any period of time without making any further investment into it. The balance amount in your Public Provident Fund or PPF Account will continue to earn interest till the account is closed.
  10. There is not restriction in age of opening Public Provident Fund Account. A Public provident Fund Account can be opened up in the name of minor and the account can be operated by his or her guardian.

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