Benefits Of Opening PPF Account in State Bank of India
The SBI PPF account is one of the most innovative ways to save tax and build a steady savings habit. Apart from that, the SBI PPF account offers numerous benefits to the account holders, including appointing a nominee and transferring the PPF account to some other banks. Given such credibility, it is evident that young India wants to invest in smart policies such as this and ensure that their saving continues to grow over a period of 15 years.
Public Provident Fund (PPF)
Public Provident Fund (PPF) is a popular long-term investment option scheme. It is backed by India’s Government and offers attractive interest rates and returns with safety. These returns are fully exempt from tax under Section 80C of the Income Tax Act.
Investors can save tax from up to a maximum of Rs.1,50,000 in one financial year. Customers can get facilities, such as loans, partial withdrawal, and extension of accounts. PPF is a good alternative for self-employed people or unorganized sectors since EPF/GPF is not available for them.
Currently, the PPF interest rate is 7.10% per annum. The calculation is based on a monthly basis but compounds annually.
Check Also: SBI PPF Interest Rate & Maturity Period
So, without any further delay, let us discuss some of the prime benefits of SBI PPF Account-
1) Tax Deductions
The first reason to invest in PPF is deductions under section 80C of the Income Tax Act, 1972. If a user has invested in PPF, he can claim a deduction when computing the total taxable income. However, the upper limit for deduction is fixed at INR 150000.
2) Habit of Savings
It is good to see that a habit of savings is created among people with the aid of PPF. Most taxpayers make monthly contributions to their PPF account, which creates a pattern of savings among people. In the absence of this policy, the same may get washed away with speculative investments or luxury spending.
3) Steady Interest per annum
The rate of interest at present is 7.10%. This amount is much higher than what current account and salary accounts earn. Therefore, it gives the investment a steady growth, and people can nurture their savings with better options. On maturity, the amount becomes even more significant.
4) Facility to Nominate
With life being uncertain, investors should have an opportunity to ensure that the policy continues to benefit others if their life suddenly come to an end. The facility to nominate a person as the beneficiary is present under PPF policy. In this way, even if the individual is not there, his policy would continue to grow and be offered to the nominee at the time of maturity.
5) Transfer to any other branch/ bank
The best of SBI PPF account is that it can be transferred to any branch/ bank/ post office. With occasions like transfer, job change, or any other reason, if a person is unable to visit the branch where his PPF was previously opened, he can get the same account transferred to a nearby bank and continue to contribute in the same manner. Neither the amount nor the accumulated interest would be affected.
The SBI PPF investment is one of the most common ways whereby Indians save taxes and save for the future. The Government of India has taken the initiative to ensure that the citizens learn to save and be prepared to meet future uncertain challenges. Through net banking access, people can also make the online transfer in their PPF account.