Interest rates have fallen and yields have come down. However, PPF is still one of the most attractive investments. Here are 7 reasons to invest in the PPF now.
Beats interest rates from banks
Though the government revises the interest rate every quarter, one thing is sure that its interest rate would continue to beat that of banks.
Banks presently offer an interest rate of 7.5 per cent, whereas you get an interest rate of 8.1 per cent on the PPF.
Income is exempted from tax
There are very few instruments in the country whose income is tax free.
The interest earned on the PPF is completely exempt from Income Tax.
Sec 80c benefits
The PPF offers you benefits under Sec 80C as well. So, investments up to Rs 1.5 lakhs qualifies for tax rebate under Sec 80C of the Income Tax Act.
The PPF is one of the safest instruments around. Being a government backed investment instruments, chances of a default are almost zero.
Building a retirement corpus
The PPF has a lock-in period of 15 years. You can partially withdraw the amount after 7 years. This makes it an excellent instrument to save for your retirement.
Not restricted only to post offices
Earlier, you could open a PPF account only at the post office. Today, you can open the account at a host of post offices, including the private sector banks. The PPF can also be freely transferred.
Small amounts can be deposited
You can deposit an amount as small as Rs 500 each year, which is a big advantage.