Public Provident Fund: If you want to raise a huge fund by investing monthly, Public Provident Fund (PPF) scheme will be perfect for this. At present, 7.1% annual interest is being given under this scheme.
Public Provident Fund (PPF) is a better investment option for long term. Investment in PPF is not only safe, but it also gets full benefits of tax exemption. For investors, the risk in this is negligible. If you want to raise a huge fund by investing monthly, Public Provident Fund (PPF) scheme will be perfect for this.
At present, 7.1% annual interest is being given under this scheme. The maturity period of PPF account is 15 years. On maturity of PPF account, you have 3 options.
Investment in PPF, the interest earned on it and the amount received on completion of the maturity period, all three are completely tax free. Public Provident Fund, the sooner you start, the more benefit you will get. Now the question arises that what to do with the account after maturity after 15 years? Let us tell you about the three options, which you can use on PPF maturity.
Option 1 – Withdraw money by closing the account
On maturity of the PPF account, the account can be closed. Withdraw the entire amount (PPF investment). The entire amount received on maturity will be tax free. It will be deposited directly into your bank account. However, for this, you will have to fill a form and give it to your bank or post office.
Second option- Extend by 5 years with fresh PPF investment
On maturity of the PPF account, if you do not need the money or if you want to continue it now, then you can extend the account for 5 years. For this, you can make a new investment by depositing a small amount. To extend the PPF account, you have to submit the form one year before the maturity. You can also withdraw money if needed during these 5 years.
Option 3 – Increase account, not invest
PPF account is not deactivated after maturity. Meaning the account will remain active and no penalty will be levied on it. If you do not want to withdraw money or do not want to make a new investment (PPF investment), then you can extend your PPF account for 5 years after maturity. You do not need investment for this. Also no paperwork is required. For the next five years, you will continue to get interest on your amount.
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