Benefits of PPF Account: A market expert says that many parents start investing in the Public Provident Fund, the government’s small savings scheme for their children’s future. But after investing for a few years, close the PPF. Investing in PPF account for your children’s future is a great idea, but the benefits of PPF will be good only if you keep it running continuously.

Benefits of PPF Account

Benefits of PPF Account

The central government is going to revise the interest rates of small savings schemes on Friday. There is a possibility that the government may increase the interest rates of Public Provident Fund for the September quarter. If you are looking to invest in a low-risk financial instrument, then a government-backed PPF account is the way to go.

A Public Provident Fund account in the name of an individual

As per paragraph 3 of the Public Provident Fund Scheme (PPF Scheme) 2019, any parent or legal guardian can open a Public Provident Fund account in the name of a minor child. More than one PPF account cannot be opened in the name of a person. Now the question arises that why parents should invest in PPF for their children and what benefits do they get from it! Let us know what are the benefits for children in Public Provident Fund!

Benefits of opening PPF account for minors

One advantage of PPF account is its lock-in period of 15 years. And when the child turns 18, he can decide whether to close the account or continue it. Your child can choose whether to close the Public Provident Fund account or keep it open once he turns 18 and the account has completed the required lock-in period of 15 years! Children who open PPF account at an early age can avoid lock-in in future.

Public Provident Fund Tax Benefits

There can be many PPF accounts in a family. One for each member is also possible. However, each person can have only one Public Provident Fund account in a post office or bank and the maximum aggregate amount that can be deposited and invested by an individual in a financial year is limited to ₹1.5 lakh.

PPF Interest Rate 2023

Pankaj Mathpal, MD and CEO of Optima Money Managers, said that when children grow up, the interest rate on PPF will not be 7% but lower as there was a time when the scheme offered 12%. It is always recommended to open the PPF account early rather than later to get the maximum benefits from PPF. The history of PPF interest rates shows that the Public Provident Fund account interest rate was 12% between April 1, 1986 to March 31, 1988 and April 1, 1988 to January 14, 2000. In the last 10 years, the PPF interest rate has ranged between 7.1. % to 8.8%. At the same time, the PPF rate is currently at 7.1 per cent.

The last time there was an increase in the Small Savings Scheme

The Central Government is revising the interest rates of small savings schemes today! PPF Account is also included in small savings schemes. The government had announced a hike of up to 70 bps in interest rates for various small savings schemes in the last quarter. The government has increased the rates of Sukanya Samriddhi Account Scheme, Senior Citizen Savings Scheme, National Savings Certificate, Kisan Vikas Patra, Monthly Income Savings Scheme and all post office time deposits in the last two quarters. In such a situation, investors are likely that the government may increase the interest rate on the Public Provident Fund for the July-September quarter of the financial year 2023-24 (FY24).

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