Each one of us have heard about PPF account at least once in our life and I also believe that it is necessary for each one of us to have a PPF account.

What is PPF Account?

If I have to answer this in one line, I’d say, something that pays you 8% post tax or almost 12% pre tax interest on your investments. To answer this question in detail, PPF is a long term small savings scheme started by the government of India for the purpose of providing income security to the citizens of India. PPF Account is similar to a bank account which can be opened in any branch of SBI. You are entitled to deposit money into your PPF account every year and whatever money is there in the account, you’ll be paid 8% returns on that. The minimum you have to put each year is just 500 rupees and thus there is no burden at all.

The only problem is locking period of 15 years from the date of opening the PPF account. This means that whatever money you put in your PPF account gets locked in for the next 15 years and you cannot cash out. After 15 years when your PPF account matures, you will be able to cash out all your money. Best of all is you are not taxed at all on any of the interests generated and whatever you earned on your savings is completely yours.

You can make use of the PPF account as a means to save some money for your future use. If you don’t have a PPF account yet, click here to read : – How To Open PPF Account?

Related posts:

1. How To Open PPF Account
2. How To Open Demat Account
3. What Is Demat Account?
4. Save Your Savings
5. How debit card payments increase your spending