Investment Tips: Public Provident Fund (PPF) is a savings scheme given by the central government. It was started with the objective of providing old age income security to the self-employed persons and workers in the unorganized sectors.
PPF is one of the best savings instruments in India with low risk and better interest rate. People working in the informal sector or unorganized sector as well as unemployed, self-employed people can invest in PPF.
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Similarly, taxpayers can claim tax deduction of up to Rs 1,50,000 annually by investing in PPF. At least Rs 500 has to be invested in this in a year. At the same time, investment of more than Rs 1,50,000 cannot be done in it. The returns offered by PPF accounts are fixed and backed by Sovereign Guarantee. Currently the interest rate is 7.1 percent.
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However, one of the most common problems that PPF account holders often face is expiring accounts. There are many situations where customers have come to know that their PPF account has expired. However, it can be easily restarted through an application form.
Under these circumstances the account may expire.
If a PPF account holder fails to contribute the minimum amount in the financial year, which is from 1st April to 31st March, the account is closed. Along with this the account holder loses the option of withdrawal facility. Also, in such circumstances, the account holder cannot take a loan against his PPF money.
