PPF Account Advantage and Disadvantage

Advantages and Disadvantages of PPF Account

Savings Accounts are the most popular type of bank accounts meant for saving of your amount and getting interest on it. You have the flexibility of deposit your fund to or withdraw your fund from the account based on your requirement. Banks provides cheque facility to savings account holders. It can be opened and operated either in single name or in joint names. Generally, all the salaried employees as well as the pensioners have this type of account. The rate of interest offered on such account is between 4% to 7% per annum. With effect from FY 2012-13, interest earned on savings account upto Rs 10,000 in single financial year is exempted from tax.

Advantage of PPF account

  1. It generates guaranteed returns
  2. It is backed by Central Government.
  3. It is very flexible means you can invest in instalments as well as lump sum. The minimum subscription amount is also minimal which is just Rs 500/- per year.
  4. The contributions made to PPF account can be claimed for tax rebate under Section 80C of Income Tax.
  5. Interest earned on the PPF account is tax free
  6. The maturity proceeds are exempt from tax
  7. It can be opened in the name of minor along with guardian.
  8. Loan facility in PPF account is available which can be availed between 3rd to 6th financial year.
  9. Partial withdrawal facility in PPF account is available which can be availed from 7th financial year onwards.
  10. PPF account can be extended for a minimum term of 5 years on in multiple of 5 years thereon as long as the account holder wishes.

Disadvantage of PPF account

  1. It cannot be opened by HUF, NRIs, Trust etc.
  2. Lack of liquidity.
  3. It has a big lock-in period of 15 years
  4. There is a capping of Rs 1.5 lakh per annum on deposit of amount in a PPF account.
  5. PPF account cannot be closed prematurely(except in case of death)
  6. Joint account is not permissible.

Upcoming Bank Holidays

2018 October 24 is a bank holiday in Andaman And Nicobar Island due to Lakshmi Puja/Maharshi Valmiki Jayanthi.
2018 October 27 is a bank holiday in Himachal Pradesh due to Karva Chauth.
2018 October 31 is a bank holiday in Sikkim due to Lhabab Duechen.
2018 November 01 is a bank holiday in Karnataka due to Kannada Rajyostsava/Kut.
2018 November 06 is a bank holiday in Andaman And Nicobar Island due to Diwali Amavasaya (Laxmi Pujan).
2018 November 06 is a bank holiday in Arunachal Pradesh due to Kali Puja/Diwali/Naraka Chaturdashi.

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