Financial transaction

The postal system will offer a return of 7.1%, better than the bank DFs; Know the details

The Public Provident Fund is a long-term investment option backed by a sovereign guarantee. Not only generally higher than FD yields, the PPF diet comes with several benefits for the common man. You can use the PPF account to accumulate long-term wealth. People who are not covered by the Employees Provident Fund (EPF) can also use the PPF as a long-term retirement planning option.

PPF interest rate 2022

The interest rate on the PPF is reviewed by the government on a quarterly basis. The current interest rate is 7.1%. The PPF interest rate for the first quarter of 2022 remains unchanged.

PPF deadline, closing/exit rules

The PPF account matures after the expiration 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 closure of the 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, only one withdrawal is authorized per year. However, the maximum withdrawal can be 50% of the balance amount at the end of the fourth year or the previous year, whichever is lower.

Interest rate, minimum deposit and tax

A PPF account will attract 7.1% per annum (compounded annually) as mandated by the RBI, and you will receive the full amount of interest at the end of each financial year. In a PPF account, you can deposit money at any time of the year, you must maintain a minimum balance of Rs. 500 and maximum Rs. 1,50,000 in one (fiscal year) FY. If one does not deposit a minimum of Rs. 500 in a fiscal year, the PPF account will be terminated.

You can make payments in a lump sum or in installments, according to your convenience in cash or by check or pay online. The deposits will be eligible for a deduction under Section 80C of the Income Tax Act, the term interest or lump sum interest, both will be tax free – making it a lucrative investment.

PPF post office: online transaction

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

Step-by-step guide to transfer money to your PPF post office via IPPB:

  • Add money from your bank account to your IPPB account.
  • Access DOP services.
  • From here you can choose products: recurring deposit, public provident fund, Sukanya Samridhi account, recurring deposit loan.
  • If you want to deposit money into your PPF account, click Provident Fund
  • Enter your PPF account number and your DOP client ID.
  • Mention the amount to be deposited and click on the “Pay” option. IPPB will then notify you of the successful payment transfer made through the IPPB mobile app.
  • You can opt for various post office investment options provided by India Post and make regular payments through the IPPB Basic Savings Account.

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