Facts about PPF you might not be aware of | Fusion - WeRIndia

Public Provident Fund (PPF) is one of the current investment methods that is followed by many people. The investment in PPF has tax exemption under section 80C of the Income Tax Act. Even the interest earned on this investment is tax free.

Furthermore, PPF offers risk free returns. That’s why several people prefer to invest in this fund for their retirement. Though several nationalized as well as private banks offer to open PPF account, all the branches are not authorized to open these accounts. In the past, PPF accounts are opened by post offices as they are authorized to open them.

There are many people who are not aware of all the facts related to public provident fund account. Here are some of them.

If you want to invest in PPF, then deposit the amount before the 5th of every month. This is because interest is calculated on the lowest balance that is kept during 5th to 30th of each month. So, if you deposit after 5th, it will yield lower interest.

You can invest the money in PPF either in one investment or 12 installments. But if you pay money by April 5th, you will get interest for the entire year. You can deposit in no more than 12 installments before 5th of every month. Many banks provide online facility to transfer directly through net banking.

PPF can be opened even in the names of minors. Yet, the maximum amount invested in this account should not exceed Rs.1.5 lakh in both the minor account and one of the parent’s account to avail tax exempt under section 80C.

If there are two kids, both the parents can avail this. In other words, the tax exempt for the entire family should not exceed more than Rs.3 lakh.

PPF can be opened in a single name and not in joint names. NRIs can just maintain the existing account but are not allowed to invest in this. Hindu Undivided Families are not entitled to open a PPF account.

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