Public Provident Fund (PPF) is a long-term savings scheme launched by the Government of India in 1968. It is a popular savings option for individuals looking to build a corpus for long-term financial goals, such as retirement, education, or marriage expenses.
Under the PPF scheme, individuals can open an account at a bank or post office and make contributions towards the account on a regular basis. The minimum contribution is Rs. 500 per year, and the maximum contribution is Rs. 1,50,000 per year. The deposits made in the PPF account earn a fixed rate of interest, which is set by the government and reviewed periodically.
The PPF account has a fixed tenure of 15 years, which can be extended in blocks of 5 years. The accumulated savings in the PPF account can be withdrawn at the end of the tenure or used to purchase an annuity to provide a regular pension during retirement.
The PPF is a safe and secure investment option with attractive tax benefits. Contributions to the PPF are eligible for tax deductions under Section 80C of the Income Tax Act, and the interest earned on the account is tax-exempt. However, it is important to note that the PPF is a long-term investment option and the funds in the account cannot be accessed before the completion of the tenure, except in certain circumstances such as illness, higher education, and home purchase.