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Public Provident Fund, so far, has proved to be a great investment option for beginners. Here's a detailed overview of PPF, including the features, interest rates offered, and benefits of investing in PPF.
If you are looking for an investment scheme which will provide you with good returns and at the same time, help you save tax, then PPF can be an ideal option for you. The Indian Government introduced the Public Provident Fund Scheme in the year 1969, which is commonly known as PPF. It is one of the nine saving schemes offered by the Government which provides exclusive benefits to the investors.
Since its inception, PPF has been one of the most popular long-term investment options in the country due to the safety of investment and attractive tax benefits. It is not surprising that PPF is one of the most recommended investment avenues suggested by investment advisors. By encouraging you to start investing early, the ultimate goal of PPF is to secure your future. PPF is offered by post offices and leading commercial banks in India.
Some of the salient features of the PPF account are as follows:
Public Provident Fund offers multiple benefits. The investment under PPF account is the safest option as it is backed by the Government of India. The deposit made under PPF account is eligible for tax deductions. Let us discuss each of the benefit offered by PPF in detail.
The Ministry of Finance does not permit a PPF account in the name of HUF (Hindu Undivided Family). If the PPF account was opened in the name of HUF, prior to May 13, 2005, the subscription might continue till the maturity. The PPF account cannot be further extended, and it has to be closed after 15 years.
However, the members of HUF can have PPF accounts. HUF can contribute to the PPF account of its members and claim the tax deduction. If you are a new investor who is just taking baby steps in the world of investment, PPF can prove to be an excellent start. PPF is by far the most preferred tax saving investment option for salaried people. It is a good option for those who wish to save regularly and take up long-term investment. PPF is not only a great option to save tax, but also provides excellent safety of the investment.
Recommended Read: What is Voluntary Provident Fund Scheme?