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5 Reasons To Invest your Money In The Public Provident Fund!

1. Small deposits

One can open a PPF account with a modest quantity of Rs 100 as it were. This implies it tends to be effectively be opened by people with a little pay. Every year, the base sum that should be saved is Rs 500.

Another fascinating element is that the PPF can be moved from one mail station to the next. An assignment office is likewise accessible under the Public Provident Fund.

Public Provident Fund
Public Provident Fund

2. High on safety

This is probably one instrument that is very high on safety. It is backed by the government of India and hence there are no worries at all.

The deposits can be made in equal installments of 12-months or in a lump sum. There are some disadvantages to the PPF as well. Among these include the lock-in period of 15 years, which could be pretty long. One cannot invest in the fund for a sum of more than Rs 1.5 lakhs. The government should increase the amount, as the same has not been raised for some time now. All in all, a superior instrument when compared to most other funds.

3. Interest rate as compared to bank deposits

The Public Provident Fund offers a better financing cost as thought about than bank stores. While bank stores offer a financing cost of around 6.5 percent 7.3 percent, the PPF offers people a loan fee of up to 7.9 percent.

The administration obviously will, in general, reexamine the loan cost normally. In any case, the pattern in the past is that the paces of premium have consistently been better than that of bank stores.

Proceeding, we see a similar pattern being held.

PPF
PPF

4. Tax exemption under Sec80C of the Income Tax

Expense exception is accessible under Sec 80C of the Income Tax Act. Along these lines, one can contribute an entirety of Rs 1.5 lakhs every year and get a tax reduction. This is a major putting something aside for those in the most astounding expense section.

There is additionally an advance office that is accessible from the third year onwards. Another intriguing component is that the Public Provident Fund no connection is conceivable under court declaration request.

This is a decent plan for those taking a gander at contributing cash at customary interims, with the premium sum being excluded just as advantages under Sec80C.

Public Provident Fund Images
Public Provident Fund Images

5. Tax-free returns

Returns from the Public Provident Fund are tax free in the hands of investors. There are very few instruments in the country, which offer tax free income to investors. For example, ULIP and tax free bonds are the other few instruments that offer tax free income.

Many individuals consider this as one of the biggest reasons to invest in the PPF. However, one thing to note is that the Public Provident Fund has a lock-in period. The scheme runs for a period of 15-years, though partial withdrawal is possible after a period of 7-years.

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