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PPF Investment: Public Provident Fund (PPF) is a great savings option. But, to invest in it, you should know all its rules. For example, how much interest is available in it. How much can you start investing with? How will you get the benefit of compound interest on investment? Also, which form is required to open and what are the conditions for taking a loan? Small Savings Scheme (SMSS) is operated by the government. Meaning it is a government guaranteed investment. In such a situation, there is no risk in it and the interest rate is reviewed every quarter. The government also changes the rules related to it many times. Let's know what are the new rules of PPF…
Form-1 for opening a PPF account
To open a PPF account, Form-1 has to be submitted instead of Form-A. To extend the PPF account after 15 years (including deposits), one has to apply in Form-4 instead of Form H one year before maturity.
How much loan will be available on PPF?
If you want to take a loan on PPF account, then you can take a loan only on 25 percent of the balance present in the account two years before the date of application. In simple language, it can be understood like this that you applied for a loan on 31 March 2022. If there was Rs 1 lakh in the PPF account two years ago (on 31 March 2020), then you can get a loan of 25 percent of it i.e. 25 thousand.
PPF: What will be the interest rate of the loan?
If you take a loan against the balance in your PPF account, the interest rate has been reduced from 2% to 1%. After repaying the principal amount of the loan, the interest will have to be paid in more than two installments. Interest is calculated from the first of every month.
What will happen to PPF account after 15 years?
If you are not interested in investing after investing for 15 years, you can continue your PPF account without investing after this time limit. You are not obliged to deposit money after 15 years. If you are choosing to extend the PPF account after maturity, you can withdraw money only once in a financial year.
PPF: How many times can you deposit money in a month?
Investment in Public Provident Fund account should be in multiples of Rs 50. This amount should be at least Rs 500 or more annually. But you can deposit up to Rs 1.5 lakh in PPF account in the whole year. You get the benefit of tax exemption on this. You can deposit money in PPF account only once a month.