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Pay 10,000/month for 10 years, Get 1,65,805/Year* for next 15 years.
ARN. No. KLI/23-24/E-BB/1201
Features
Ref. No. KLI/22-23/E-BB/999
Investing in a PPF account offers tax benefits, attractive interest rates, and security, making it a preferred choice for long-term wealth accumulation and financial stability.
Imagine you have a hidden box where you can keep your money safe, and over time, it grows all by itself! That is kind of how a PPF account works. The Public Provident Fund (PPF) is a special savings plan backed by the government that not only helps you save money but also makes it grow in the long run. And the best part? The government helps you protect this money and lets you keep this amount to use for future goals.
Since PPF benefits have always been seen as one of the safest and most rewarding ones in India, it is best for you to explore what is PPF account and its benefits in detail.
As we briefly explored, a Public Provident Fund, or PPF, is a long-term savings scheme offered by the government of India that helps you save and grow money over time. Now, imagine you put a little money into your savings every month, and over the years, it keeps getting bigger because the government gives you extra money (called interest) to save it. Interesting right?
Well, it is, in fact, that interesting!
When you put money into a PPF account, the government adds extra money to it every year as interest. This amount gets locked in for a tenure of 15 years, and during that time, it earns at a rate set by the government. One of the biggest advantages of PPF account is that it is highly safe, and the money you save in it grows without you worrying about losing it. To top off all these PPF account benefits, you do not have to pay taxes on the money you earn from it. You can simply keep adding money to your PPF account for many years, and when you require it, you can use this money later for important things like retirement, education, or buying a home while enjoying tax benefits.
You must already know by now how PPF works. It meets the needs of investors who avoid risks and want steady returns by providing financial security along with several other benefits. Let us explore the many PPF account benefits further.
You briefly explored how the government provides you extra money on your savings in a PPF. This interest rate changes every few months, and in 2024, the PPF interest rate remains profitable for investors, providing steady investment growth with a current rate of 7.1%. While the PPF interest rate changes from time to time, it always gives good returns, making it a great option for long-term savings.
You know how you might get nervous about losing your savings in certain investments? Well, one of the most compelling PPF account benefits is its low-risk nature and guaranteed returns. It is one of the safest investments backed by the Government of India. This means there is zero risk involved, and you also get protected from market fluctuations and uncertainties.
So, the standard lock-in period for a PPF account is 15 years. But what if you do not need the money just yet? No worries! You can extend the tenure by another 5 years once it is completed. By extending in blocks of five years, you can continue to enjoy the PPF account benefits of tax-free returns and compounded growth.
This may be one of the best PPF benefits for many people. By investing in PPF, you can claim tax deductions under Section 80C of the Income Tax Act. Plus, the interest you earn and the final amount you get when the account matures are all tax-free. This makes the PPF scheme a smart choice if you want to save on taxes.
PPF accounts follow strict rules and are highly secure. Your money is protected by the government, meaning it is not going anywhere. This means you do not have to worry about market ups and downs affecting your savings.
If you ever need money during an emergency, PPF has you covered. You can take a loan against the balance in your account without withdrawing it. From the 3rd year to the 6th year of your account, you can borrow up to 25% of the amount in your PPF without losing any benefits. This way, your savings continue to grow, and you still get the cash you need.
While the money in your PPF is locked in for 15 years, you do not need to wait that long if you need some cash. After 6 years, you can withdraw part of your money for important needs. Whether it is for education, a medical emergency, or buying a home, PPF allows you to access a part of your savings without any hassles.
PPF is a reliable pension tool, offering a steady income stream during your retirement years. By consistently saving in your PPF account, you build up a huge sum over 15 years or more. This can serve as a pension for you, giving you financial security when you no longer have a regular income.
Due to PPF account benefits, you always know how your money is growing. The government calculates the interest monthly but adds it to your account at the end of the year. So, there are no surprises. Moreover, you can easily track how much interest you are earning and how much your savings are growing.
Before investing in a PPF account, it is essential to understand the eligibility criteria governing this investment opportunity.
You must be an Indian citizen to invest in a PPF account. Unfortunately, if you are an NRI (Non-Resident Indian), this option will not be available for you. However, your existing accounts can still be maintained until maturity, subject to certain conditions.
The age criteria for opening a PPF account vary slightly depending on the rules governing the account holder:
While you can hold only one PPF account in your name, you can also be the guardian of a PPF account for a minor. However, the cumulative contribution to all PPF accounts (individual and guardian accounts) cannot exceed the prescribed annual limit.
To open a PPF account, you are required to submit the following documents:
Opening a PPF account requires an initial deposit, the minimum amount determined by the respective bank or post office where the account is opened. After that, you can keep adding as much as you want, but no more than ₹1.5 lakhs a year. You can either make one big payment or smaller ones throughout the year.
So, after learning all about PPF account benefits and eligibility, you must be excited to start a PPF account. This is a great choice for your savings journey. Whether you are a tech-savvy person or prefer a traditional approach, opening a PPF account is easy. You can either do it online or offline by simply following these steps.
If you are more comfortable with online banking, you can open your PPF account right from your phone or computer. Most banks offer an easy online process where you can create your PPF account within minutes.
If you prefer doing things the old-fashioned way and in person, you can visit your bank branch or the post office to open an account. Here is how:
Investing in a PPF offers many PPF account benefits that can help you reach your financial goals. It offers great interest rates, is safe, and gives you tax advantages. Plus, it is flexible, making it a solid choice for long-term financial stability in today’s world.
Now that you know what is PPF account and its benefits, you can start saving for the future and build up your wealth over time. Considering all these perks, putting your money into a PPF account is a smart way to ensure a secure and successful financial future!
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No, the tenure of a PPF account can be extended in blocks of 5 years after maturity.
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There is no limit. You can keep extending the tenure in 5-year blocks as long as you want.
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Yes, a PPF account can be prematurely closed after the completion of 5 financial years, subject to certain conditions and penalties.
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The lock-in period for a PPF account is 15 years, after which it can be extended indefinitely in blocks of 5 years.
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You can open only one PPF account in your name. However, you can also be the guardian of a PPF account for a minor.
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All contributions, interest earned, and maturity proceeds from a PPF account are entirely tax-free under the Income Tax Act.
Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors
Pay 10,000/month for 10 years, Get 1,65,805/Year* for next 15 years.
ARN. No. KLI/23-24/E-BB/1201
Features
Ref. No. KLI/22-23/E-BB/999
The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The content has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Further customer is the advised to go through the sales brochure before conducting any sale. Above illustrations are only for understanding, it is not directly or indirectly related to the performance of any product or plans of Kotak Life.
