Top Benefits of PPF

With its numerous investor-friendly characteristics and accompanying benefits, the public provident fund is a popular investment strategy among investors. PPF is a government-sponsored savings plan that offers a competitive rate of interest and investment returns. This plan is often used as a prerequisite for financial needs when it comes time to retire. The primary goal of people who register a PPF account is to protect their principal. Let us understand some of the advantages of a public provident fund. 

Must Read: Should You Buy Add-Ons With a Term Insurance Plan?

What are the Benefits of a Public Provident Fund (PPF)?

Here are some of the benefits of a public provident fund. 

• Easy Implementation - With Aadhaar authentication and a link to your Savings Bank account, you may invest and manage your PPF account online. This makes it instantaneous and simple to use, with no need for paperwork.
• Long Term Savings -  PPF allows for long-term savings due to its 15-year lock-in period. Hence, you can plan for your long-term objectives such as your retirement fund and your children's higher education. Moreover, the investor is entitled to interest on interest, which is the benefit of compounding on one's deposits.
• Investment Flexibility - A PPF account user can invest as little as $500 and as much as 1.5 lakh in a single financial year. In a given financial year, one can make up to 12 deposits into one's PPF account. As a result, money can be deposited in a PPF on a monthly basis, similar to a SIP. Instalments can be made monthly, half-yearly, quarterly, or annually. It will be easier for you to plan your finances as a result of this.

• Extension of Tenure - The maturity duration of a PPF account is 15 years. However, by submitting the 'PPF Account Extension Form,' one can extend one's PPF account in five-year increments. So, a PPF account holder who started their employment early can use their PPF account as a retirement-oriented investment vehicle by taking advantage of the limitless extension provision.

• Withdrawal - Despite the lengthy lock-in period, you have the option of withdrawing a portion of your assets after five years. As a result, it's a customizable investment that can be tailored to fit any budget.

• Returns - PPF has sovereign status since it is backed by the government, making it a very safe investment. PPF interest rates are linked to government securities rates and are set by the government every quarter. As a result, you can assess the potential returns on your investment.
• Tax Benefits - PPF is a one-of-a-kind savings vehicle because of its EEE (exempt, exempt, exempt) status. PPF provides tax benefits at all three stages of investing: the initial investment (which is eligible for a tax deduction under Section 80C up to Rs 1.5 Lakh), interest accrual, and withdrawal.

Conclusion

The Public Provident Fund (PPF) is a long-term investment option with a competitive rate of interest and returns on investment. Individuals with a low-risk appetite should consider a public provident fund scheme. Guaranteed returns back up this plan as it is mandated by the government to defend the financial needs of the Indian people. Furthermore, the PPF account's invested funds are not market-linked. Hence, investors can diversify their financial and investment portfolios by joining a public provident fund.

Also Read: Important Benefits Of Life Insurance Renewal Process

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.