New Delhi: When we hear of PPF, we think of our office PF account where some money is reduced from our salary and transferred to our account. But you should know that apart from the PF account of office, there is another PPF account that helps you in getting remission from income tax in addition to options for amazing deals in retirement plans.
An office PF account is also known as an APF account, but many facilities of a PPF account differs from an APF account. Therefore before taking any decision always be acquainted with the accurate information about both the accounts.
Difference between EPF and PPF accounts
EPF accounts: PF account is a fund for the employees. Here, some amount from the employees' salary is deducted and deposited in the PF office. This amount is fixed by the government officials and the appointer too submits his share. The employee gets an 8.5 percent interest on the accumulated amount.
PPF: PPF (Public Provident Fund) is a scheme operated by the central government. It is run by the banks and post offices. You can start a PPF account when desired. It is not essential to be employed to start a PPF account. If you are a counsellor, freelancer or even a contractor, you can get your accounts opened. Here you get an 8.7 percent interest on the amount you deposited.
How to open a PPF account:
To open a PPF account it is not an necessary to have a bank account. You can go to any state bank or even a post office. In this type of an account, your money is held for minimum 15 years and more.
The procedure to open an account is very effortless. First choose where to open an account. Afterwards fill a PPF form where you will have to mention your successors name with his signature. A witness will also be a needed during this step. Please keep in mind not to have the same people as your witness and successor. With the form, you will have to submit your address proof and passport size photograph. Subsequently fill a receipt with the desired amount you want to deposit in the account. With this, the bank will hand you over a passbook where your name and your successors name will be mentioned. In this account you can deposit minimum Rs 500 and maximum Rs 75000 every year.
Value of a PPF account:
In the past, the government gave the workers pension after their old age, and this practice was common as well in private organizations. But now we have to plan our future on our own after retirement. Therefore a PPF is good investment for your retirement plan.
The major profit you get is an 8.7 percent interest every year on the amount deposited. Also income tax is not deducted from a PPF account. With the maturity of this account the money received is tax free, and also helps in your children's education and marriage afterwards. For getting the best results from a PPF account, deposit your money at a young age.
Transfer of a PPF account from Post Office to Bank :
Ordinarily, people have a misconception that a PPF account can only be started in a Post Office. In fact, it can also be started in a Bank. If your account is in a post office, you can reallocate it to the bank anytime.
First collect all the necessary information such as which bank has the facility of a PPF. Then fill a form which will involve you to give all the required information about your account and submit it in the post office. Also attach your pass book photo copy with the form.
After filing an application, the post office will first analyse and then accordingly shut down your account and transfer it to the bank. The information of your account will be transferred to your new bank and will be intimated to you.