Have you heard about the PPF?

January 17, 2010 Leave a Comment

For an average investor who wants peace of mind and decent returns on his investment what is better Investment vehicle than the Public Provident Fund (PPF) offered by Government of India. It also acts as a tax saving instrument allowing you to save 70,000 Rs per annum taxable income under 80C section of Income Tax. The maturity period of the account is 15 years and the Rate of interest is 8% compounded annually. It is mandatory to at least deposit 500 Rs every year into your account. Currently under 80C section it is EEE (Exempt-Exempt-Exempt), so neither the principle or the interest is taxable. It is recommended to open a PPF account early in your career and have a substantial deposit every year to have a good corpus built up by maturity.

Even though PPF offers consistent long term investment opportunity, it is being neglected by most due to its low 8% rate. But considering the current Deposit interest rates hovering around 7%, why not plan something for the future via PPF. The investment is Exempt from taxable income and offers consistent 8% rate for 15 years. For anybody who is worried about such a long term investment let me remind you that there is also an option of securing a loan on the deposit amount.

For more information contact Local Post Office or State Bank Of India and affiliates.