SBI PPF account: Latest interest rates, tax benefits, other key details

SBI PPF account: Latest interest rates, tax benefits, other key details

New Delhi: State Bank of India (SBI), the country’s biggest bank by assets and customers, offers the facility of public provident fund (PPF) among other investment options. Any individual can be open this account in his or her name and also on behalf of a minor at any branch. On Friday, the government cut the interest rates on small savings schemes including public provident fund (PPF) and National savings certificate (NSC) by 0.1 per cent for the July to September quarter.

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PPF and NSC will fetch an annual interest rate of 7.9 per cent from the existing rate of 8 per cent. The rate of interest on PPF is determined by the government on a quarterly basis. The interest is calculated on the minimum balance in PPF account between 5th day and end of the month and is paid on 31st March every year.

A minimum sum of Rs 500 and a maximum of Rs 1.5 lakh can be invested in a PPF account in one go or in a maximum of 12 installments per year. According to the website, the subscriber should not deposit more than Rs 1.5 lakh per annum as the excess amount will neither earn any interest nor will be eligible for rebate under Income Tax Act. The amount in this account can be deposited in a lump sum or in a maximum of 12 installments in a year.

Upon investing in this account, an individual can claim income tax benefits under Section 88 of Income Tax Act under which the interest income is totally exempt from income tax. Apart from this, the amount outstanding to the credit is also fully exempted from wealth tax. It comes with a lock-in period of 15 years and upon maturity, the tenure can be extended up to five more years.

Another important feature is that loans and withdrawals are also permitted depending upon the age of the account and balances as on the specified dates. It also offers a nomination facility in the name of one or more persons.

The facility of premature payment is allowed only after the account has completed five financial years, where a) the amount is required for the treatment of serious ailments or life-threatening diseases of the account holder, spouse or dependent children or parents, on production of supporting documents from competent medical authority; b) that the amount is required for higher education of the account holder or the minor account holder, on production of documents and fee bills in confirmation of admission in a recognized institute of higher education in India and abroad.

Worth mentioning here is that the account can be transferred to other branches or other banks or Post Offices and vice versa upon request by the subscriber. The service is free of charges.

Source:- timesnownews

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