PPF Account Rules: PPF is a better investment option to meet the needs of children or family. This investment scheme is operated under the government and currently it gives an interest of 7.1 percent annually. Its interest is reviewed every three months by the Finance Ministry. By investing in this, you can save tax on annual income up to Rs 1.5 lakh under 80C.
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After opening the account, you will have to deposit Rs 500 every year for the number of years your account remains closed. Also, Rs 500 or more will have to be deposited for the current financial year. Apart from this, you will have to pay Rs 50 for every year for which payment has lapsed.
It would be good to deposit money in it every year. If due to some reason the money is not deposited then you can deposit the money and get it started again. To reopen a closed PPF account, you will have to submit a written application.
If the minimum amount is not deposited, you get interest after the PPF account becomes inactive but it has many disadvantages. The first disadvantage is that you cannot take loan against PPF account. You have to pay a fine for restarting it.
If you are not able to deposit even Rs 500 annually, then your PPF account becomes inoperative. Apart from this, you can deposit a maximum of Rs 1.5 lakh in it in a financial year.
Both the annual interest and maturity amount received under investment in PPF are tax-free. But if you also invest in it, then it is important for you to follow some rules. As per the rules, you are required to invest at least Rs 500 every year.
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