5 Lesser Known Facts About Public Provident Fund (PPF Account)

Public Provident Fund (PPF) is a long-term savings plan which is backed by the Government of India. A PPF account gives you complete security with attractive interest rates and tax-free returns. You can start investing with as minimum as Rs. 500 and go up to Rs. 1, 50,000.

Most experts still recommend investing in a PPF account as an important component of financial planning as it is one of the safest savings plan options. Here are 5 lesser known facts you need to know about a public provident fund, if you plan to use it as a savings tool for retirement planning:

1. Liquidity

   Even though your PPF account has a lock-in period of 15 years, it gives you an option of partial liquidity. You can avail it via partial withdrawals and loans. However, the availability of these loans and withdrawals are subject to some conditions. The interest rate which will be charged on the loan is higher than 2% of the interest which you earn in the scheme. Moreover, you are authorised only for a single withdrawal during the financial year.

2. PPF Account Transfer

   You can transfer your PPF account from one bank branch to the other and to other banks. Further, the transfer is also possible from your post office PPF account to banks, and vice-versa as well. 

3. Maturity Date Calculation

   Are you aware that the maturity date of your PPF account isn’t calculated from the day when you opened the account? As per the norms of Public Provident Fund Schemes, the maturity date is calculated from the end of the financial year in which the deposit is made. Therefore, it is irrespective of the date and month in which it is being opened.
   For example, if your first deposit was made on August 21, 2015, then your lock-in tenure of 15 years will be calculated from March 31, 2016, and your year of maturity will be April 1, 2031.

4. Number of Nominees

   Another fact is that PPF account allows you to nominate more than one nominee. In case, you want to nominate more than one person; then you are required to mention the share that is to be allotted to each nominee. The nominee gets the ownership of the account in case of the death of the account holder. The nominee can receive the money as a trusted authority for the beneficiaries who are entitled to it. During the tenure of PPF account, you can change or cancel the nomination facility anytime. However, if an account is opened on behalf of minors, then the nomination is not permitted.

5. Golden Investment

   The money saved in your PPF account is only and only yours. No one else has the right to take it away from you. Are you confused? Consider the following example; when you purchase a home on loan or EMIs, and in case if you fail to pay it on time, then your home can be seized. The biggest advantage of a PPF is that, not even the court can order you to clear your debts through your PPF account.

What are you waiting for? Invest your money in one of the best savings plan option - Public Provident Fund (PPF). Also, another safe way to plan for your retirement apart from a PPF account is with a pension plan. Go on, start saving for your golden years today!

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