Public Provident Fund is an ideal scheme for investing in small savings schemes. You can start investing with a small amount and deposit up to a maximum of 1.5 lakh rupees in a year. Here your money will be completely safe. The interest rate on PPF is currently 7.10 percent.
The central government has changed the norms related to PPF over the last few years. If you too have invested in the PPF scheme then you must know about it.
It is necessary to invest in a PPF account in multiples of Rs.50. This amount should be at least Rs.500 or more per annum. But in PPF account, you can deposit up to Rs.1.5 lakh in the entire financial year. This is the only tax-deductible benefit available. Apart from this, money can be deposited in a PPF account only once a month.
You can avail loan against your PPF account balance. Interest has to be paid on this. Currently, the interest rate for this has been reduced from 2 percent to 1 percent. After paying the principal amount of the loan, you have to pay the interest over two installments. Interest is calculated on the first of every month.
Instead of Form A, Form-1 should be submitted to open a PPF account. For extension of PPF account after 15 years, one year before maturity, the application should be made in Form-4 instead of Form H.