Thread by @KhushbooAGala

Thread 🧵on Public Provident Fund #PPF

Everything you need to know about PPF.

Must read for everyone, especially youngsters as retirement planning should start at young age.

(If you like then please re-tweet to maximize reach)

#InvestmentPlanning #RetirementPlanning #Pension

#RetirementPlanning should start at very young age for maximum benefit of #PowerofCompounding.

& ... PPF can be one of the good investment avenues to make a large retirement corpus.

This Thread will explain details of PPF

@caniravkaria @Vivek_Investor @VidyaG88 views welcome

1/n

Public Provident Fund #PPF is a retirement benefit scheme introduced by the central government.

It is a popular long-term investment option that offers a high degree of safety to your investment capital.

#ProvidentFund #Investing #InvestmentPlanning #RetirementPlanning

2/n

In #PPF you get to earn interest at an attractive rate and reap returns that are fully exempted from tax.

Investors even get facilities such as loans, withdrawals and extension of accounts.

#ProvidentFund #Investing #InvestmentPlanning #RetirementPlanning

3/n

Only eligibility criteria to open a #PPF account is that you must be a resident Indian citizen. PPF can also be opened in the name of an eligible minor.

There is no minimum or maximum age limit for it.

#ProvidentFund #Investing #InvestmentPlanning #RetirementPlanning

4/n

A PPF account can be opened at anytime during the year in the name of an -

👉 Individual
👉 Joint (Two or more)
👉 Minor with parent/guardian

#ProvidentFund #Investing #InvestmentPlanning #RetirementPlanning

5/n

#PPF requires minimum deposit amount of Rs.500 per year and maximum amount which can be deposited in PPF Account is Rs.1,50,000 in one financial year.

#ProvidentFund #Investing #InvestmentPlanning #RetirementPlanning

6/n

Current interest rate on #PPF is 7.1% per annum (compounded annually) and is credited to the PPF account at the end of each financial year.

This rate of interest is revised by the government periodically.

#ProvidentFund #Investing #InvestmentPlanning #RetirementPlanning

7/n

#Interest on your PPF account is calculated on lowest balance between fifth and last day of the month.

So to maximize your earnings, try making deposits to your PPF account between 1st and 5th of the month.

#ProvidentFund #Investing #InvestmentPlanning #RetirementPlanning

8/n

#PPF account matures after 15 years from the date of the first investment.

One can then exercise on option to close it or to continue the account for an additional block of 5 years.

#ProvidentFund #Investing #InvestmentPlanning #RetirementPlanning

9/n

The entire amount in your #PPF account can be withdrawn only at maturity.

Pre-mature closure of a PPF account is permissible only in case of death.

#ProvidentFund #Investing #InvestmentPlanning #RetirementPlanning

10/n

You can withdraw once a year, from 5th year onwards.

Such withdrawals, must not exceed, 50% of balance at end of fourth year, or 50% of balance at end of the immediate preceding year, whichever is lower.

#ProvidentFund #Investing #InvestmentPlanning #RetirementPlanning

11/n

You can take a loan on your #PPF deposit. Such loans can be taken from third year onwards till the sixth year.

#ProvidentFund #Investing #InvestmentPlanning #RetirementPlanning

12/n

#PPF provides tax benefits under Section 80C of the IT Act, 1961. It allows income tax deductions up to Rs.1.5 lakh on amount invested in the scheme.

#ProvidentFund #Investing #InvestmentPlanning #RetirementPlanning

13/n

#PPF follows the EEE (Exempt-Exempt-Exempt) model of taxation which implies that the interest earned and the maturity amount both are exempted from taxes.

#ProvidentFund #Investing #InvestmentPlanning #RetirementPlanning

14/n

#PPF can be treated as good #Pension scheme if a subscriber extends the tenure without opting for further contributions. In that case, a person earns good pension amount in form of tax free interest income.

#ProvidentFund #Investing #InvestmentPlanning #RetirementPlanning

15/n

Balance in #PPF account is not subject to attachment under an order or decree of court in respect of any debt or other liability other than Income Tax or other such government taxes.

@caniravkaria & @VidyaG88 views invited

#InvestmentPlanning #RetirementPlanning

16/n

In layman's language, in case of insolvency the money in #PPF account will not be attached to the assets. So only this investment is truly ours, come what may.

@caniravkaria & @VidyaG88 views invited

#ProvidentFund #Investing #InvestmentPlanning #RetirementPlanning

17/n

One main disadvantage of #PPF is that it offers lower returns than Mutual Funds, NPS, etc.

Another disadvantage is that PPF has limitations on withdrawals.

#ProvidentFund #Investing #InvestmentPlanning #RetirementPlanning

18/n

#PPF account can be opened at any post office, branches of nationalized or branches or select private banks.

#ProvidentFund #Investing #InvestmentPlanning #RetirementPlanning

19/n

The process of opening a #PPF account is simple, you just need to fill up a form and attach a photograph and submit necessary documents like copy of PAN Card and Aadhar Card.

#ProvidentFund #Investing #InvestmentPlanning #RetirementPlanning

Concluding the Thread 🧵on PPF with a glimpse of main features of PPF.