Public Provident Fund (PPF)
The Indian government backs the popular long-term savings plan known as Public Provident Fund (PPF). It is an investment plan that does not have to pay taxes and aims to give people financial security in the years after retirement. The PPF plan is open to all Indian residents, and the annual minimum investment is INR 500. INR 1.5 lakhs is the maximum amount that can be invested each year.
The interest rate is set by the Indian government, and the PPF scheme has a 15-year maturity period. As of May 2023, the annual interest rate is currently set at 7.1%. Annual interest is tax-free and compounded. You can contribute to your PPF account through online banking or by going to the bank or post office closest to you. PPF account holders can likewise make fractional withdrawals after the completion of the sixth year of opening the account.
Anyone over the age of 18 in India is eligible to open a PPF account. PPF accounts for children can also be opened by parents, and they are treated as separate accounts. PPF accounts can be opened at any authorized bank or post office. People can likewise move their PPF accounts from one approved bank or mail centre to another. The 15-year maturity period for PPF accounts can be extended in 5-year blocks, allowing account holders to continue earning tax-free interest on their investments.
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