Public Provident Fund

                Publc Provident Fund

PPF Account is a favourite tax saving option in our country. Deposits made in PPF accounts up to prescribed limits are eligible for relief under section 80C of Income Tax Act. PPF accounts are EEE means Exempt, Exempt, Exempt from every tax. The maximum amount can be deposits up to 1.5 lac per annum in a maximum of 12 installments in a financial year. The maturity period of the PPF account is 15 years, but actually It is 16 financial year. The nomination facility is available.

  

     Features of Public Provident Fund

Interest rates keep on changing as per market interest rates. The interest is compounded annually. A PPF account cannot be transfered from one person to another. A depositor can avail of loan facility in the third financial year from the financial year in which the account was opened. Premature closure of a PPF account is not permissible except in the case of death of the depositor. A depositor can make partial withdrawl once every year from his PPF account after expiry of five years.

According to me PPF account is not the best option for long term purpose. Instead of investing in PPF account I would suggest to invest in ELSS because  it also provides relief under section 80C of Income Tax Act. The return given by ELSS is far more than the return given by the PPF account till maturity.