Public Provident Fund (PPF) is a good option for investing in small savings schemes. Here you can start with a small amount and deposit up to a maximum of 1.5 lakh rupees in a year. Here your money is completely safe. Recently, the interest rate on PPF has been kept at 7.10 per cent by the government. But in the last few years, the government has changed its rules.
Know about these changes:-
Investment in the PPF account is necessary for multiples of Rs 50. This amount should be at least Rs 500 or more annually. But in a PPF account, you can deposit up to 1.5 lakh in the entire financial year. Only on this, you'll get the benefit of tax exemption. Apart from this, money can be deposited in a PPF account only once a month. You can also take a loan against the balance in the PPF account. Recently, this interest rate has been reduced from 2 per cent to 1 per cent. After paying the principal amount of the loan, you will have to pay the interest in more than two instalments. Interest is calculated on the 1st of every month.
Even after investing for 15 years, if you are not willing to invest, then you can continue your PPF account without investment. It is not necessary to deposit money in this account after the completion of 15 years. You can withdraw money only once in a financial year if you opt to extend the PPF account after maturity. To open a PPF account, instead of Form A, Form 1 has to be submitted. For extension of PPF account after 15 years (with deposits) one year before maturity, one has to apply in Form-4 instead of Form H. The loan is also available against the PPF account. Its rule is that if the balance in your account 2 years before the date of application, You can get a loan of only 25 per cent of it. Understand this in simple language, you applied for a loan on 31st March 2022. Before this, 2 years ago (31 March 2020), if there were 1 lakh rupees in the PPF account, then you can get 25 per cent of it i.e. 25 thousand loan.