Why investing in a PPF now is a good idea | Fusion - WeRIndia

PPF remains a great investment even now despite the fall in interest rates and yields. Here are some reasons why investing in a PPF now is a good idea.

They give higher interest rate than banks

Even though the interest rate is revised by the government every quarter, the interest of PPF would almost always beat the interest you get from banks. Currently banks have an interest rate of 7.5 per cent and on the other hand, you get an interest rate of 8.1 per cent on PPF.

Tax exemption in the income

There aren’t that many financial instruments which give tax free income. PPF is one of them. The interest from PPF is completely exempt from Income Tax.

Sec 80c benefits

Having a PPF even gives you benefits under Section 80C. Under Sec 80C of the Income Tax Act, investments up to Rs 1.5 lakhs qualifies for tax rebate.

Very safe instrument

Investing in a PPF is one of the safest things to do. This is because it is backed by the government. The chances of a default are almost zero.

Building a retirement corpus

PPF is great for retirements. They have a lock-in period of 15 years. After 7 years, you can make partial withdrawals from the amount. This means the amount will be saved nicely for retirement.

Not restricted only to post offices

In the past, people could only PPF accounts at the post office. However, one can open a PPF account at a host of post offices, including the private sector banks. The PPF can also be freely transferred. This makes it a great time to make an investment in PPF account.

Small amounts can be deposited

If you want to save more money, you can even deposit small amounts every year. Rs. 500 can be deposited every year.

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