What is the Full Form of PPF?

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The full form of PPF is the Public Provident Fund. This banking term refers to a popular long-term savings and investment method in India. It is a government-backed scheme that enables individuals to save and build a reliable retirement corpus or meet other financial goals while enjoying tax benefits as mentioned under Section 80C. 

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Features of a PPF Account

Here are the important characteristics of a PPF account:

  • Investment tenure: PPF accounts come with a fixed tenure of 15 years on investment. Thus, individuals can only withdraw their funds completely after this period with valid reasons. Additionally, investors can determine whether or not to extend this fixed tenure by 5 years according to their requirements.
  • Principal amount: Individuals can use their PPF accounts to invest a minimum of Rs. 500 and a maximum of Rs. 1.5 Lakh every year. This investment can be done in 12 installments in a year or on a lump sum basis. 
  • Loan against investment: You can further use your PPF accounts as collateral for obtaining loans based on your investments. However, it is essential to note that these loans are only available between the beginning of the 3rd year and the end of the 6th year from when a user activates their account. In addition to this, the maximum loan duration for PPF loans is 36 months. The loan amount can be up to 25% of the total balance in your account. 
  • Interest: The interest payable on a PPF account is determined by the Government of India. Despite its changing nature, interest rates on a PPF account are generally higher than commercial banks. Generally, this interest is somewhere around 7.1% and is subject to change. 

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