Public Provident Fund: Everything to know

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Public Provident Fund: Everything to know

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A self-financed retirement plan is a great way to save for your future. A public provident fund is an open universal account that anyone can manage. It means you don’t need special qualifications to invest in one, just common sense and good sense about investments. PPF offers a great tax-saving opportunity for most taxpayers.

However, it isn’t a get-out-jail card for all taxpayers. You need to know some basic things before investing in this savings plan. Read on to learn more about it:

What is a Public Provident Fund?

A public provident fund is a long-term savings instrument that allows you to invest in a government savings scheme. The government of India offers this PPF to help you save for future goals. PPF is an interest-free loan from the government. You are allowed to earn interest on the amount you deposit.

The government has made it easier to open a PPF account online. PPF is a long-term investment option. Long-term investments are a great way to grow your money over time.

Who can invest in PPF?

Anyone can invest in a PPF account. Unlike other investment avenues, you can open a PPF account regardless of your age or how much you earn. The PPF calculator available today will give you better insights into it. You can open a PPF account if you are a citizen of India. You must have an Indian bank account to deposit money in a PPF account. Children below 18 years and adults above 60 can also open PPF accounts.

• Loan option

In addition to investing in a PPF account, you can also take a loan from this account. However, you should know that you must repay the loan amount and interest within the tenure mentioned. You can take a loan from the PPF account for up to 50% of the total amount in the account.

• Tax benefits

The main benefit of a PPF account is that you get a significant tax benefit while investing in it. This is because the interest you earn from a PPF account is tax-free. This is unlike other investments, such as stocks, in which you need to pay taxes on the dividends you earn. Besides not paying any taxes on the amount you make from a PPF account, you can also claim a deduction on your investment in a PPF account. This means you can reduce the taxes you have to pay.

Final Words

When saving money for the future, you have many different options. The best choice for you will depend on a variety of various factors. A PPF account is an excellent way to save for retirement. It is a low-risk investment guaranteed by the government of India.