Benefits of PPF (PPF) – Public Provident Fund Account: Let us know what are the benefits of investing in PPF.
PPF (PPF) – Public Provident Fund Benefits in Hindi: Public Provident Fund (PPF) is a better investment option for the long term. Investing in PPF is not only safe, but also offers the full benefit of tax exemption. There is little risk in this for investors. Since investment in PPF is fully protected by the government, it is completely risk free. PPF is one of the most suitable investment options for self-employed professionals and employees not covered by EPFO. Apart from this, people who do not have any organized structure for jobs or business, can choose PPF for long term investment.
Do not think about PPF in such a way that money is to be added to this account once a year. If invested with a little planning, PPF can prove to be a good investment in your financial portfolio. Let us know what are the benefits of investing in PPF.
Better interest rate
The central government revises the interest rate on PPF account every quarter. The interest rate on PPF has always been 7 percent to 8 percent. It may increase or decrease slightly depending on the economic situation. Currently, the interest rate on PPF is 7.1 percent, which is compounded annually. Comparing this to the fixed deposits of many banks, Public Provident Fund (FD), PPF pays more interest to its subscribers.
Expansion of tenure
The scheme has a period of 15 years for subscribers after which the amount coming under tax exemption can be withdrawn. But subscribers can apply for another 5 years. And they can choose whether they want to continue the contribution or not.
Tax benefit
In the Public Provident Fund, there is a tax benefit under Section 80C of the IT Act. In this, deduction of up to Rs 1.5 lakh can be taken on the amount invested in the scheme. Both the interest and maturity amount earned in PPF are tax deductible.
Investment security
By having a government-backed savings scheme, the subscriber gets full protection from investing in it. There is sovereign guarantee on the interest earned, which makes it more secure than the bank’s interest. In comparison, insurance on deposits up to Rs 5 lakh is provided by Deposit Insurance and Credit Guarantee Corporation (DICGC) on bank deposits.
Loan facility
Subscribers can take loans on PPF account at the appropriate interest rate. By opening an account to a loan benefit, you can take advantage of the loan in the third and sixth year. This is especially beneficial for those who want to apply for a short-term loan.
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