Public Provident Fund (PPF) Account
Individual who are Resident of India are eligible for open a Public Provident Fund Account (PPF) scheme. A person who is not complete age of 18 can also open a PPF Account by his / her legal guardian. Non Resident Indians (NRIs) are not eligible for open a PPF account.
A Minimum amount of Rs 500/- is required for open the PPF Account and person deposit Maximum Rs 100000/- in a Financial Year. Limit of Transaction is 12 for whole Financial Year. So person can deposit money in PPF Account by Installments. Person can deposit money by Cash, Cheque, and Demand draft. A person who is open PPF Account with SBI also transfers Funds by NET Banking and NEFT.
The Government of India decides the rate of Interest on PPF Account is 8.70% p.a. This Rate of Interest is applicable from 1st April 2013. The Interest is calculated on the lowest balance between the Fifth day and the last day of month. The Interest is calculated by compounded for every year.
The Time period of PPF Account is 15 years, which can be further extended in block of 5 years each for any number of blocks. Loan facility is available from 3rd financial year to 5th financial year. The Rate of Interest charge of Loan taken against PPF Account shall be 2% p.a. on or after 01.12.2011.
Person can withdraw full amount of money after 15 years. The maximum amount can be withdraw pre maturity is equal to 50% of the amount that stood in your account at the end of 4th year preceding the year in which the amount is withdrawn or the end of preceding year which ever is lower. After the 15 years all amount of PPF can be withdrawn and all amount is tax free amount including Interest amount.
If A person is not contribute of minimum amount in any year is not invested the account is deactivated. Then person give the penalty of Rs 50/- for each inactive year and also deposit Rs 500/- for activated PPF account.
In case the death of Account holder before the Time of maturity of account then the whole amount of PPF account given to nominee of Account before Five years too. If balance amount is more then Rs 100000/- then deceased nominee has to prove the identity to claim the amount.