A maximum of Rs 1,50,000 can be deposited in PPF account in a financial year.
Grandparents can open a PPF account for their grandchildren in case of their parent’s deaths.
Investment in the Public Provident Fund (PPF) has been gaining popularity these days. It offers both savings and tax exemption options. The PPF investments also offer secure return as the government keeps on revising the interest rate from time to time. So, if you are looking for a long-term investment option then PPF could be a good option for you.
However, before making the choice, you should know the key details like investment limits, tax benefits, the number of PPF accounts you can open and interest rates, among others.
The interest rate for PPF investments is decided by the government every quarter. Currently the interest rate for PPF has been fixed at 7.1%.
Who can open a PPF account?
The Public Provident Fund, one of the most popular investment schemes among small savings schemes, can be opened by any Indian resident in his own name. Along with this, one of the parents can simultaneously open a PPF account for a minor child.
In case of parents’ death, grandparents can also open a PPF account for their grandchildren.
How many PPF accounts can be opened by a single person?
A person can only have one PPF account, as per the existing rules. There is a limit of one PPF account per person. However, in some exceptional cases, it has been seen that investors open PPF accounts in the name of their wife and minor children.
PPF account tenure and investment limit
The PPF account is opened for a minimum tenure of 15 years and then it can be extended in the blocks of 5 years each. In a financial year the maximum deposit limit in a PPF account is Rs 1,50,000. The investors should make a minimum deposit of Rs 500 in the PPF account in a financial year to keep it active.
As per the rules, there is a provision to levy a penalty of Rs 50 each year if the PPF account holder fails to deposit the minimum amount. Loans can be availed against your PPF deposits between the 3rd and 5th year of opening the account and after the 7th year, partial withdrawal is allowed for financial emergencies.
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