PPF Investment Rules: Often people think that by investing money in PPF for a long time, they can become a millionaire till retirement. If you are also thinking of investing money in PPF, then you should follow 9 rules related to it.
Due to the excellent returns and tax exemption of Public Provident Fund i.e. PPF, it is becoming everyone’s favorite. The principal amount invested under this is not taxed under Section 80C. At the same time, the interest received on this also remains out of the scope of tax under Section 10. Often people think that by investing money in PPF for a long time, they can become a millionaire till retirement. If you are also thinking of investing money in PPF, then you should follow 9 rules related to it.
1- Who can open PPF account?
PPF is a scheme that matures in 15 years, which can be extended further in blocks of 5 years. You can open it in both bank and post office. You can transfer the account from one place to another, both from bank to post office and from post office to bank. A person of any age can open it.
2- PPF deposit, when and how often?
A person can deposit money in PPF account maximum 12 times in a year. If you want, you can deposit money every month or if you want, you can deposit the entire money in one go at the beginning of the year.
3- PPF interest rate
You get guaranteed returns on PPF. This is because its money is not invested in the stock market, hence returns do not increase or decrease depending on the performance of the stock market. The interest rate on PPF is decided by the government and is reviewed every quarter. At present this rate is 7.1 percent.
4- PPF Deposit Limit
You are required to deposit at least Rs 500 in PPF, so that the account remains active. You can deposit a maximum of Rs 1.5 lakh in this account in a year. If you deposit more money than this, you will neither get any interest on it nor will you get tax exemption under 80C. This excess amount is returned to the subscriber without any interest.
5- PPF account in the name of the child
PPF account can be opened in the name of the child by the parents of any child. If a grandparent wants to open a PPF account for his or her grandchild, they cannot open it. Only parents can open an account in the name of the child.
6- How many accounts can be opened
A person can open only one PPF account. It can be opened at any one of the bank or post office. One account cannot be opened at both the places. However, you can definitely transfer your account from one place to another. If two accounts are opened by mistake, the second account will be treated as a regular account.
7- Premature closure of PPF
If you want, you can close your PPF account even before maturity. However, this is also possible only after completion of 5 years. Also, you can get it stopped under certain conditions. The condition for premature closure of PPF and withdrawal of money is that the money should be used for some fatal disease. This can be withdrawn for the treatment of the account holder, his partner, child or parents. Besides, you will also have to take necessary permissions from the medical authority.
8- Separate form for nomination
When you fill the PPF form (Form-A), there is no option to file nomination in it. For this you have to fill a separate form. Keep in mind that you must fill the nomination form (Form-E), so that there is no legal problem regarding the nominee later.
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