PPF Accounts stands for Public Provident Fund account, which is a kind of long-term investment and is a scheme under Government of India. PPF is a kind of long term debt on which the investor earns a tax free return in the same way as you earn on fixed deposit; only thing is that the return is higher in case of PPF. Anyone can invest in PF scheme ranging from salaried person to a self-employed business man. PPF account can be availed in either Post Office or some Banks which has authorization by Government of India. People generally prefer to open an PPF account in a bank as compared to Post office because of the availability of online deposit facility, which is absent in case of Post Office.
NRI’s are not given the option to apply for PPF account, but in case if anyone has opened a PPF account as a citizen of India and later become an NRI then he is permitted to continue the account. There are few other benefits of PPF account that you can use to save tax.
PPF interest rate is controlled by Government of India and the current ongoing PPF Interest rate is 8.8 percent, which is an increased rate from earlier 8.8 percent interest rate and has been in effect from April 1st, 2012. You must be wondering how the interest rate is applied. Well, the interest rate is calculated on a basis of calendar month followed between 5th days of the month to the end of the month. Therefore, whatever is the lowest balance in the account between the period of 5th of the month and the last date of the month is considered for the computation of interest. The total interest earned on the PPF account is credited to total balance at the finish of the year. The investment tenure of PPF account is that of 15 years and one can close the account any time post that.