Post Office Scheme Will Offer 7.1% Return, Better than Bank FDs; Know Details

Public Provident Fund is a long-term investment option that comes with a sovereign guarantee. Not just generally higher than FD returns, the PPF scheme comes power-packed with several benefits for the common man. You can use the PPF account to accumulate wealth over the long term. Individuals, who are not covered by Employees Provident Fund (EPF), can also utilise PPF as a long-term retirement planning option.

PPF Maturity, Closing/Withdrawal Rules

PPF account matures after the expiry of 15 years from the end of the financial year in which the account was opened. PPF account holders can extend their account in blocks of 5 years each after maturity.

Premature closing of PPF account before 15 years is generally not advised. However, you can close the PPF account prematurely after the completion of 5 years for specific purposes such as medical treatment, higher education of children etc.

From the 7th year, one withdrawal is allowed in a year. However, the maximum withdrawal can be 50 per cent of the balance amount at the end of the fourth year or the immediately preceding year, whichever is lower.

Interest Rates, Minimum Deposit and Tax

A PPF account will attract a 7.1 per cent per annum (compounded yearly) as mandated by the RBI, and you will receive the total interest amount at the end of each FY. In a PPF account, you can deposit money any time in a year, you have to maintain a minimum balance of Rs. 500 and maximum Rs. 1,50,000 in an (financial year) FY. If one fails to deposit a minimum of Rs. 500 in an FY, the PPF account will be discontinued.

You can make the deposits in lump-sum or installments, according to your conveniences by cash or cheque or pay online. The deposits will qualify for deduction under section 80C of the Income Tax Act, the term interests or the lump sum interest, both will be tax-free ? making it a lucrative investment.

Post Office PPF: Online Transaction

Post Office account holders can easily carry out basic banking transactions easily through India Post Payment Bank (IPPB). With IPPB one can easily check their balance, transfer money, and carry out other financial transactions through IPPB for which they had to visit the post office earlier.

Step-By-Step Guide for Transferring Money in your Post Office PPF through IPPB:

• Add money from your bank account to your IPPB account.
• Go to DOP services.
• From there you can choose products- Recurring Deposit, Public Provident Fund, Sukanya Samridhi Account, Loan against Recurring Deposit.
• If you want to deposit money in your PPF account, then click on Provident Fund
• Enter your PPF Account Number and DOP Customer ID.
• Mention the amount that needs to be deposited and click on the ?Pay? option.IPPB will then notify you for successful payment transfer made through IPPB mobile application.
• You can opt for various post office investment options provided by India Post and make regular payments through IPPB basic savings account.

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