PPF Account is a no risk great investment strategy for beginning in 2021. If you are a beginner in respect of investment and if you are a new employee or started your career just now then PPF is a great investment policy for you. There are several investment strategies in the fields of investment for the future life of you as well as your family. Some of them are high risk, high profit, low risk low perfect and medium risk medium profit. But PPF is a great deposit opportunity to get your money on an average.
What is PPF?
Let’s know what PPF is. The full form of PPF is Public Provident Fund. Know the meaning of provident fund-
PPF is one of the best and great investment schemes in the PF field as well as investment fields.
The employees in organised sectors may be in government or private employers of those sectors are bound to deduct PF amount from the employees salary and credit to their PF account. The amount of PF is fixed as a percentage of employees’ basic salary.
Who can open a PPF?
Anybody can open a PPF account, a person may be an individual and an employee or maybe not. That means a businessman or an employee of the public or private sector can open a PPF account.
The person must be an Indian but he cannot be a HUF(Hindu undivided family) or NRI. A permanent citizen can open a PPF account in any branch of a bank or post office.
A person is free to invest in a PPF account. If you are a new employee of any sector you are also free to open a PPF account.
I am saying this Investment for Beginners in 2021, but it does not mean that an advanced person can not open this account or advanced person will face any problem.
When is the best time to open PPF?
As early as possible PPF accounts should be opened. There are two types of PPF investors, can be divided. One type is self-employed or businessman and another is a service holder in the private or public sector.
PPF for Self-employee/Business Holder-
The persons in this field are free to open PPF accounts. PPF accounts should be opened immediately at the age of 20/25/30/35/40 or any. Starting to open an account for this investment is suitable at an early age between 25-30 according to us.
PPF for Service Holders-
If you are a new employee, open a PPF account and start investing as early as possible at the time of joining month or within the first year of your service.
As You are an employee so you must be under PF scheme. This PF is processed through your employer and company. You and your employer are bound to do PF procedure. A minimum percentage of your basic salary is deducted. Of course you can request your employer to deduct more than the minimum fixed amount.
But in respect of PPF account you are free to operate your account. Here your employer is not involved. If you are interested in investing more for the future you can open a PPF account.
Why PPF account-
There are several benefits and advantages of PPF accounts.
1.PPF is free to Open-
I told you earlier. PPF can be opened by any body of Indian citizens. Maybe self employed or business holders or even permanent employees of a government or private sector.
2.No bound to deposit every month-
You are free to deposit your PPF amount in any time of a financial year. You are not bound to deposit every month. Uou deposit minimum of Rs- 500 at any time of availability of money.
Target should be great, so invest a higher amount to get a higher profit.
You know the interest rate of any investment field is lowering daily. But the interest rate of PPF is greater than other fields. The interest rate is equal to EPF and GPF. Do not think PPF is not similar to the other PF section.
4.Various Sectors to open PPF-
There are various sectors to open a PPF account. Banks and Post offices welcome to open PPF accounts. Private and government both banks are given the right to open a PPF account.
Rate of interest is the same in all the sectors. The ongoing rate of interest of EPF is 7.1%.
5.Facility of Loan-
You have the right to claim a loan from your invested PPF amount. Loan is approved according to your invested amount.
Procedure of application for PPF loan is very simple and sanction time is also very flexible.
6.Facility of withdrawal-
Withdrawing any off deposit amount is very simple and flexible also. You can withdraw your PPF amount at any time of your emergency.
7.Income tax relief-
8.Last but not the Least- this No Risk Great Safety Investment.
How much is deposited in a year?
You can deposit a minimum amount of Rs- 500 and maximum of Rs- 150000 during a financial year. In the other explanation- you must deposit an amount minimum one time of Rs- 500 and maximum twelve times of Rs-150000.
You decide when and how many times you take to deposit the maximum amount of Rs- 150000. It may be one time or it may be twelve times.
All it depends on the availability of your money. Total deposited amount is tax relieved U/S- 80c of chapter VI of income tax rule.
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Demerits of PPF-
All the PPF investment is very popular and highly preferable, but it also has some demerits.
1.Low Profit investment-
The profitable amount is very low compared to the other sectors. Such as share market, mutual fund etc.
2.No Close option-
PPF accounts cannot be closed at any time. You can withdraw money from your investment. But it does not close.
3.Maximum 15 years duration-
PPF accounts exist maximum for 15 years duration. If you are interested in continuing to invest in a PPF account, you cannot do so.
How to open PPF Account-
Any bank or post office can open a PPF account. Wherever you wish to open you may go there and open a PPF account.
Government as well as private banks also have the right to open this account. These accounts may be open offline or maybe online internet banking systems also.
You should have a savings account in that particular bank or post office. The branch may be anywhere in India. But PPF accounts may not be in that particular branch, but that particular Bank only.
How to open PPF account in SBI-
You should have a savings account with SBI. Go to any branch of your bank, fill up the PPF form. Submit it to a particular desk attaching your KYC, photograph etc and just relax.
Remember you should have a check facility for a savings account. If you do not use a check to deposit into a PPF account,it cannot be deposited in an offline physical transaction.
But in case of online internet banking you are free to transfer from your savings account into your PPF account. You can do SI(Standing Instructions) also from your online internet banking.