Public Provident Fund (PPF) is a popular investment option where one gets guaranteed returns and fixed income. It is run by Post Office and the scheme is aimed at providing stable income to investors. If you are planning to invest in PPF, you must know about some things related to it, which people often do not pay attention to.
Public Provident Fund (PPF) is considered a good investment scheme for those people who want to invest for a long time and are not ready to take any market-linked risk in terms of returns. PPF is a scheme in which, guaranteed returns are available. This scheme is for 15 years. At present, interest on PPF is 7.1 per cent. If you also want to invest in this scheme, you must know about some things which people often do not pay attention to.
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Fear of interest rate change
The interest paid on PPF is decided by the Finance Ministry. It is reviewed every quarter.
In such a situation, there is always a possibility of interest rate change.
If we look at the previous interest rates, in the Year 2013, interest on PPF 8.8 per cent.
Later in 2014, it decreased to 8.7 per cent.
After this, a major change took place in the Year 2016, when it came down to 8.1 per cent.
After that, another cut was made in 2016 itself and on October 1, 2016, the interest rate of PPF came down to 8 per cent.
After this, the next change happened in the year 2017 when on April 1, the government reduced the interest rate of PPF to 7.9 per cent.
Just three months later, in July 2017, the interest on PPF was reduced to 7.8 per cent.
On January 1, 2018, the interest rate of PPF was reduced to 7.6 per cent.
However, on October 1, 2018, it was again increased to 8 per cent.
On July 1, 2020, the interest rate was reduced again to 7.9 per cent.
After this, the government cut it on April 1, 2020, to 7.1 per cent.
Since then, the PPF interest rate has remained at 7.1 per cent.
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No more than one account
Just like you can get multiple FDs, open more than one RD account, you do not get such facility in PPF.
You can operate only one account in PPF.
However, you can definitely participate as a guardian while opening a PPF account in the name of your minor child, but in that also, only one of the parents can become the guardian.
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No joint account option
Just as you get the option of joint account in savings account, RD or any other scheme, this is not the case in PPF.
Only one person can open it in their name.
But you can definitely make a nominee in a PPF account, and decide everyone’s share on the deposit.
NRIs cannot invest
If you are an NRI, you cannot invest in PPF scheme.
However, if your PPF account is already open and you get NRI status after that, you can continue your account, but after maturity, you will not get the option of account extension.
