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Index Fund Corner
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| Scheme Name | 1-Year Return | Invest Now | Fund Category | Expense Ratio |
|---|---|---|---|---|
| Axis Nifty 50 Index Fund | +32.80% | Invest Now | Equity: Large Cap | 0.12% |
| Axis Nifty 100 Index Fund | +38.59% | Invest Now | Equity: Large Cap | 0.21% |
| Axis Nifty Next 50 Index Fund | +71.83% | Invest Now | Equity: Large Cap | 0.25% |
| Axis Nifty 500 Index Fund | — | Invest Now | Equity: Flexi Cap | 0.10% |
| Axis Nifty Midcap 50 Index Fund | +46.03% | Invest Now | Equity: Mid Cap | 0.28% |
What is the Public Provident Fund (PPF)?
Introduced by the National Savings Institute of the Ministry of Finance, the PPF is a savings and investment scheme, established under the Public Provident Fund Act of 1968. The scheme is meant to offer individuals a secure avenue for long-term financial planning.
As a saving scheme, it offers a reasonable rate of interest and returns on investment. The scheme matures in 15 years; however, it can be extended in blocks of five years each. It provides flexibility in terms of the investment amount, where people can invest a minimum amount of ₹ 500 and a maximum of ₹ 1,50,000 in a financial year.
Importance of a PPF Account
The Public Provident Fund is an ideal option for risk-averse investors looking for a reliable investing vehicle. While returns are not market-linked, it carry no risk of capital loss, making it a secure investment for your portfolio.
Another significant advantage is the tax benefits linked with PPF investments. The PPF deposits must be made by the fifth of each month to earn interest. Interest is calculated using the lowest balance between the fifth and the end of the month.
Features of PPF
Eligibility: The PPF scheme is open to all Indian citizens, including salaried and self-employed. Additionally, minors can also open a PPF account in their name that is managed by their parents.
Interest Rate:
The current interest rate on PPF accounts is 7.1%, with quarterly updates at the discretion of the government.
Deposit: The minimum amount required to open a PPF account is ₹500, while the maximum annual deposit limit is ₹1.5 lakh in a financial year.
Tenure: The PPF account offers an initial lock-in period of 15 years, extendable in blocks of 5 years. Additionally, partial withdrawals are permitted in the seventh year, subject to certain restrictions and limitations.
Mode of deposit: The deposit can be made through cash, cheque, demand draft (DD) or through an online fund transfer.
Tax Benefits: Under Section 80C of the Income Tax Act of 1961, it offers tax benefits up to ₹1.5 lakh.
Transferability: A Public Provident Fund (PPF) account can be transferred from one authorised bank or Post office to another and it will be considered as a continuing account.
Advantages of Investing in a PPF Account
Investing your money in this scheme can be profitable in the long run because the program is government-backed and provides consistent returns. You can begin saving through PPF and accumulate a fund that can be used after retirement as well as for a future purpose.
Disadvantages
It offers a lower interest rate than the Employee Provident Fund (EPF), which makes it less attractive for salaried employees. Additionally, a PPF account matures in 15 years and is better suited for investors looking to invest for a very long time.
There is also a fixed maximum deposit limit where a person can invest a maximum of ₹ 1.5 lakh in a financial year. As per PPF regulations, early premature closure is not allowed and is only permitted under a few circumstances. An investment in PPF depends on individual preferences and risk appetite.
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