What are the major benefits and limitations of PPF Accounts?

The PPF account stands for Public Provident Fund Account which is governed by the central government. It is considered as a long term and risk-free investment opportunity. In this article, let us discuss what are the advantages and disadvantages of investing in PPF (Public Provident Funds) accounts. 

 

The fixed deposits have been the primary choices of the majority of people in India. For those, it could be one of the best modes of investment with assured returns because the rate of interest is also higher than other types of deposits. 

Let us discuss other significant benefits and limitations of PPF Accounts in brief.

 

Advantages of PPF Accounts:

Thus Investing in public provident funds offer several benefits when it is compared to other types of deposits like saving deposits, fixed deposits, recurring deposits or Flexi deposits.

 

Disadvantages of PPF Accounts:

 

Eligibility:

Any individual who is resident of India is eligible to open a PPF account in the post offices or any popular banks, but an NRI can’t open a PPF account in India. 

Nevertheless, if you have already opened a PPF account before having NRI status, you can still operate it up to 15 years but it can’t be further extended.

The PPF account of minors can also be opened but it shall be operated by their parents.

 

How to open a PPF Account?

The process of opening a PPF account is very simple. You can either approach the post offices and commercial banks or can apply online. 

You need to carry proof of identity, address and passport size photo and then fill the application form (Form A). The minors PPF account can also be opened under parents supervision.

If you hold an account in ICICI bank or HDFC bank, you can directly request for opening a PPF account through the internet banking portal.

 

Wrapping Up:

The PPF investments have always been preferred mode of investment for salaried as well as working professionals. The returns are not only guaranteed by the government but at the same time, it provides monthly compounding rate interest as well. 

Moreover, the downside partFree Articles, the rate of interest is not fixed depending upon the market and the lock-in period is also very long. 

 

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