PPF account: Lesser known and interesting facts about your Public Provident Fund that you must not miss
Public Provident Fund is a saving instrument of the government of India that comes with a lock-in period of 15 years. Minimum amount required for investment is Rs 500 . The interest rate is fixed and paid by the government every quarter.
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PPF interest rate for the third quarter of the year 2020-21 i.e. from 1st October to 31st December was fixed at 7.1%. Currently, the limit to claim tax exemption under PPF is Rs 1.5 lakh and it is expected that Finance Minister Nirmala Sitharaman may increase this limit to Rs 3 lakh to provide much-needed breather to pandemic-hit middle class in the Budget today.
In fact as per a report by Business Today, the Institute of Chartered Accountants of India (ICAI) has recommended the government to double the Public Provident Fund (PPF) contribution limit to Rs 3 lakh from Rs 1.5 lakh. There are some lesser known and Interesting fact about this account too that every PPF account holder should know. Take a look:
*A Public Provident Fund account can be opened by a single resident Indian (adult) and a guardian on behalf of a minor.
*It can also be opened by retired defense employees above 50 years of age and below 60 years of age, subject to the condition that investment to be made within 1 month of receipt of retirement benefits are eligible to open.
*PPF does not allow a joint account
*In PPF, the maturity date is calculated from the end of the financial year in which the sum of money was deposited.
*Investors are advised to always deposit their installments before or on the fifth of every month. This allows them in getting interest benefit for that month.
*The interest rate on PPF accounts is calculated on the minimum balance in the account between the fifth day of the month and the last day of the month.
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