India Post, which operates a network of more than 1.5 lakh branches across the country, offers nine savings schemes. The interest rates applicable to these post office saving schemes are revised on a quarterly basis. One such savings scheme offered by post office is 15-year Public Provident Fund (PPF) Account, according to its website, indiapost.gov.in. A post office PPF account can be opened by cash or cheque. In case the account is opened by cheque, the date of realisation of cheque in government's account shall be date of opening of account.
Here are key things to know about post office Public Provident Fund Account:
A person needs a minimum of Rs. 100 to open the account but has to deposit Rs. 500 in a financial year. The maximum limit in a financial year is Rs. 1,50,000, according to India Post. Deposits can be made in lump-sum or in 12 installments.
The post office public provident fund account offers an interest of 7.9 per cent per annum, which is compounded yearly, noted India Post.
A PPF subscriber cannot close the account before completing the 15-year period. However, the tenure can be extended within one year of maturity for further five years and so on.
Income tax benefit
Investment made under PPF account also qualifies for income tax benefits under Section 80C of the Income Tax Act, 1961. Interest earned is also tax-free.
Premature withdrawal is permissible every year from seventh financial year from the year of opening account. The account also offers loan facility from the third financial year.