PPF is public provident fund account, which can be opened with any of the Nationalized banks. e.g SBI bank gives facility to open PPF account.
Must know details about PPF account -
1. Minimum Rs. 500 yearly are enough to keep your PPF account active. Hence it should be opened at the early age. PPF accounts can be opened by individuals with salary or self-employed, with a minimum initial deposit of just Rs. 100. Individuals can also open the PPF account for their minor child.
Accounts can be opened at any branch of the State Bank of India (SBI) or branches of its associated banks.
Other nationalized banks which offer this service are -
Bank of India
Central Bank of India and
Bank of Baroda.
2. The maximum amount that can be deposited is Rs. 1,00,000 in a financial year. Deposits can be done on flexible basis. Yearly 12 installments are allowed.
3. The interest rate in your PPF account is calculated on the lowest balance between the fifth and the last day of the month. In order to maximize your earnings, try making deposits between the 1st and the 5th of every month. Interest is compounded annually and credited on 31st March of every year.
4. The complete amount in your account can be withdrawn only on maturity. Partial withdrawals are permitted subject to certain limits. You can withdraw once a year, from the 7th year onward.
5. The amount deposited in a PPF account is eligible for a tax deduction under section 80C. The complete maturity amount including the interest is non-taxable. The interest earned is tax free.
6. You can take a loan on your PPF account, subject to certain terms and conditions. Loans can be taken from the third year on wards till the sixth year. Up to a maximum of 25 per cent of the balance at the end of the 2nd year immediately preceding year would be allowed as loan. Such withdrawals are to be repaid within 24 months. Rate of interest charged on the loan would be 2 per cent more than the PPF interest rate prevailing then.
7. You can extend the PPF account after the 15 year tenure with or without further subscription, for any period in a block of five years. If you do not remove the invested amount for 15 years, due to compounding interest, you will earn almost double of your investment. The balance in the account will continue to earn interest at normal rate till the account is closed. In case the account is extended without contribution, any amount can be withdrawn without restrictions.
Only one withdrawal is allowed per year. If you continue the account after 15 years, with continued deposit, withdrawal up to 60 per cent of the balance at the beginning of each extended period (block of five years) is permitted.
8. Consider PPF account as your retirement income, 5% of your total earnings should be considered for PPF account.
1. Minimum Rs. 500 yearly are enough to keep your PPF account active. Hence it should be opened at the early age. PPF accounts can be opened by individuals with salary or self-employed, with a minimum initial deposit of just Rs. 100. Individuals can also open the PPF account for their minor child.
Accounts can be opened at any branch of the State Bank of India (SBI) or branches of its associated banks.
Other nationalized banks which offer this service are -
Bank of India
Central Bank of India and
Bank of Baroda.
2. The maximum amount that can be deposited is Rs. 1,00,000 in a financial year. Deposits can be done on flexible basis. Yearly 12 installments are allowed.
3. The interest rate in your PPF account is calculated on the lowest balance between the fifth and the last day of the month. In order to maximize your earnings, try making deposits between the 1st and the 5th of every month. Interest is compounded annually and credited on 31st March of every year.
4. The complete amount in your account can be withdrawn only on maturity. Partial withdrawals are permitted subject to certain limits. You can withdraw once a year, from the 7th year onward.
5. The amount deposited in a PPF account is eligible for a tax deduction under section 80C. The complete maturity amount including the interest is non-taxable. The interest earned is tax free.
6. You can take a loan on your PPF account, subject to certain terms and conditions. Loans can be taken from the third year on wards till the sixth year. Up to a maximum of 25 per cent of the balance at the end of the 2nd year immediately preceding year would be allowed as loan. Such withdrawals are to be repaid within 24 months. Rate of interest charged on the loan would be 2 per cent more than the PPF interest rate prevailing then.
7. You can extend the PPF account after the 15 year tenure with or without further subscription, for any period in a block of five years. If you do not remove the invested amount for 15 years, due to compounding interest, you will earn almost double of your investment. The balance in the account will continue to earn interest at normal rate till the account is closed. In case the account is extended without contribution, any amount can be withdrawn without restrictions.
Only one withdrawal is allowed per year. If you continue the account after 15 years, with continued deposit, withdrawal up to 60 per cent of the balance at the beginning of each extended period (block of five years) is permitted.
8. Consider PPF account as your retirement income, 5% of your total earnings should be considered for PPF account.
To get the PPF calculation file click here.
How to use the file ?
Enter the amount to invest monthly in the yellow box. This will give you the output with -1. Amount Invested Monthly2. Amount Invested in 15 years3. Total Interest Earned in 15 years4. Total maturity amount on 15th year
It also gives you the year on year view of the amount balance deposited in your account along with the effect of compounding interest.
Done.....
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