Public Provident Fund: It is often advised to invest in Public Provident Fund (PPF) by telling its merits. Do you know that investing in PPF can also have disadvantages. Today we are going to tell you why you should not invest in PPF. Actually PPF is a popular long-term savings scheme in India. From April 1, 2023, an interest rate of 7.1% has been given for investing in it.
Why not invest in PPF
- PPF interest rate is lower than EPF interest rate, which is not very beneficial for salaried individuals. Such people can get better returns and tax benefits through VPF. Currently, the EPF rate is 8.15% while the PPF rate is 7.1%. Salaried people use PPF to reduce the taxable income. Experts say that instead of investing in PPF, salaried people can get higher interest rate by investing in Provident Fund through VPF.
- PPF account takes 15 years to mature. PPF is a better option for people who want to invest in it for a long time.
- You can put a maximum of Rs 1.5 lakh in PPF account. VPF is a better option for salaried employees who want to invest more money, as there can be a deduction of up to Rs 2.5 lakh without additional tax.
- There are strict conditions for withdrawing money before PPF. Under this, there is a withdrawal limit in every financial year after five years except the year of account opening.
How to close PPF account quickly
- The account holder, his spouse or his dependent children have a life-threatening illness.
- In case of higher education of the account holder or his dependent children
- The residence of the account holder has changed
Premature closure of PPF account will be charged at 1% interest rate from the date of account opening. Although PPF is one of the biggest investment and tax saving scheme for those people who are without salary.
