You have not opened the public provident fund (PPF) account then you are missing something. Government has announced to increase the rate of intrest on PPF. Notification about this will come very soon and intrest rate will increase from present rate of 8% to 8.6%. In the atmosphere of rising intrest rate, government should have already increased interest rate but “Better late than never”.
Why PPF is better ?
PPF accounts are flexible. Account survival can be maintained by depositing just Rs 500 once in a year and according to new rules announced by government, Rs 1 lac can be deposited in a year, earlier it was Rs 70000. PPF deposits can not be withdraw in first five years. After five years you can withdraw money if you need. Term of the PPF account is 15 years.
PPF is best for tax planning
If you are an income tax payer then how you can ignore the PPF account if you want to save tax. In this option of savings you get tax saving as well as there is no liability of paying any type of taxes at the time of withdrawl. If you see from the angle of security of deposits then PPF account is unique, the is no other option like this. Government seal is there on the sequirity of PPF account.
Where can be opened PPF accounts
PPF accounts can be opend in Post Offices. Apart from this PSU banks which are eligible to deposit income tax are also authorise to open PPF accounts.PPF accounts opening is very simple just like opening a savings account in a bank. This account can also be opened in the name of your children.
Unique option in indecisive market conditions
Share market is in dilemma for last some months. Indecisive market conditions are there in all over world. Investment market too is not stable. Debt instruments are somewhat good these days but mutual fund market is similar as share market. In these conditions 8.6% taxless gauranteed return of PPF account is far better. We should keep PPF investment as a main chunk of our investment portfolio.
Bell the Bull says : Interest rate increases to 8.6%, what are you waiting for, open your PPF account.