If you want to make your future financially secure, then the Public Provident Fund (PPF) scheme of State Bank of India (SBI) can be a great option for you. It not only provides good returns for the long term, but also gives an opportunity for tax saving. Through this scheme, you can move towards a secure future by investing at a fixed interest rate. In this article, we will give complete information about SBI PPF scheme, so that you can understand how beneficial this scheme can be for you.
What is SBI PPF Saving Scheme?
SBI PPF is a government guaranteed scheme, which provides good interest in the long term. Currently, this scheme is getting 7.1% annual interest, which can be revised by the government from time to time. After opening a PPF account, its duration is 15 years, and during this time you get the benefit of compounding interest. Also, this scheme provides tax exemption under section 80C of the Income Tax Act.
Process and conditions for opening a PPF account
The following conditions apply to open an SBI PPF account
Only Indian citizens can invest in this scheme.
Foreign nationals (NRIs) are not eligible to invest in this scheme.
To open an account, you can visit an SBI bank branch or apply online.
The minimum investment amount is Rs 1,000 per year, while the maximum investment can be up to Rs 1.5 lakh per financial year.
The amount deposited in the PPF account is compounded on a quarterly basis, which gives excellent returns in the long term.
The account holder has to deposit a minimum of Rs 1,000 every year, otherwise the account may become inactive.
Possible returns on an investment of Rs 50,000
If you invest Rs 50,000 every year in the SBI PPF scheme, then after 15 years your total deposit amount will be Rs 7,50,000. But at the interest rate of 7.1%, you will get around Rs 13,56,070 at the end of 15 years. Out of this, Rs 6,06,070 will be in the form of interest only, which is a good benefit.
Key Benefits of SBI PPF Scheme
Tax Savings: Investment made in this scheme is tax free under Section 80C.
Tax Free Interest: Interest received on PPF account is completely tax free.
Long Term Benefit: After a period of 15 years, you can extend the account in blocks of 5-5 years.
Safe Investment: This scheme is risk free as it is backed by the government.
Loan Facility: After 3 years of PPF account, you can also take a loan against your investment.
FAQs related to SBI PPF Scheme
1. Can an NRI invest in this scheme? No, only Indian citizens can invest in this scheme.
2. For how many years is a PPF account valid?The maturity period of a PPF account is 15 years. After this it can be extended for 5-5 years.
3. Does investing in this scheme provide tax benefits?Yes, under section 80C, tax exemption is available on investments up to Rs 1.5 lakh.
4. How is interest paid in a PPF account?Interest in a PPF account is compounded every quarter, giving you better returns.
Conclusion
SBI’s PPF Savings Scheme is a great option for investors who are looking for safe and tax-free investments for the long term. It not only gives better returns but also provides a great opportunity for tax saving. If you also want a low-risk, guaranteed return and tax-free investment plan, then SBI PPF scheme can be the perfect option for you.