Why PPF account is the safest investment instrument

The Public Provident Fund is a long–term investment instrument offered by the Government of India (GOI). Being a scheme of the GOI, it is one of the safest investment scheme that offers stable returns over the long term.
 
Let’s look at the features of the scheme and the advantages it offers.
• Any Indian citizen can open a PPF account

• Parents can open account in the names of their minor children

• Account can be opened at designated post offices, branches of nationalised banks and some of the private sector banks such as ICICI Bank, Axis Bank, IDBI Bank, etc

• Joint PPF account cannot be opened

• NRIs cannot open a PPF account. However, if a resident accountholder becomes an NRI after opening the account, it can continue till maturity on non-repatriation basis.

• Deposits can be made in lump sum or in 12 instalments in a year.

• The minimum deposit amount in a year is Rs 500 and the maximum is Rs 1.50 lakh.

• Maturity period of the scheme is 15 years, which can be extended at the time of maturity  for a further period of 5 years. There is no limit on such 5-year extensions.

• Premature closure is not allowed before 15 years, except in the case of death of the accountholder.

• Deposits in PPF account are exempt under Section 80C of IT Act.

• The current rate of interest is 7.8% compounded annually. The interest rate may be revised on quarterly basis.

• Interest on PPF account is completely tax free.

• Nomination facility is available at the time of opening and after opening the account

• The PPF account can be transferred from one post office to another.

• Loan facility on PPF account is available from third financial year after opening the account. Interest charged on loans is 2% more than the prevailing interest rate on PPF deposits.

• Partial withdrawal is permitted every year from the seventh financial year from the year of opening.

• PPF account cannot be attached by any court decree order.