No changes have been made in the minimum and maximum amount that can be contributed to a PPF account but the minimum amount required to open it has changed. (Photo Credit: PTI)
The government has made some changes in the existing PPF Scheme 1968 which is expected to benefit public provident funds or PPF account holders. PPF, one of the most popular small saving schemes, has a maturity period of 15 years. The changes are related to the reduction in interest payable on the loan, continuance of PPF account after maturity, increasing situations in which premature closure is allowed and others. There are certain features that will remain unchanged such as no changes in minimum contribution and safety from court decree. Here’s we are going to tell you more about PPF Rules 2020 that will have a significant impact on your savings.
1. PPF Contribution: No changes have been made in the minimum and maximum amount that can be contributed to a PPF account but the minimum amount required to open it has changed. According to the new rule, the contribution can be made in multiples of Rs 50 and should not be less than Rs 500 and not more than Rs 1.5 lakh. Earlier, this used to be in multiples of Rs 5 and the maximum numbers of contributions were not allowed above 12.
2. New Form: Earlier, a person was required to fill Form A for the opening of a PPF account. But now it has been changed and now one can open his or her account by filling Form1. Similarly, changes have been in the form required for extension of the PPF account after 15 years. Now it can be extended by submitting Form-4 one year before maturity.
3. PPF Account Extension Without Deposits: There is the option of retaining the PPF account after the 15-year maturity period without even making any contribution. In such a case, one withdrawal can be made in each financial year.
4. Interest Rate: The rate of interest on loan taken against PPF has been reduced to 1 per cent from earlier 2 per cent. After the principal amount is fully repaid, loan interest shall be paid in not more than two monthly installments.
5. Loan Amount: PPF account holder can take a loan of up to 25 per cent of the PPF balance available in his account.