The government has replaced the existing PPF scheme, 1968 with the new PPF (public provident fund) scheme, 2019.
Some of the key changes are as follows :
1. Interest on the loan taken on PPF
- Individual can take loan on the basis of PPF account from 3rd year but only till 6th year.
- Interest rate on such loan is only 1% p.a. This rate is applicable only on the loan taken after 12th December, 2019.
- Such loan must be repaid in 36 months. If not, interest rate after 36 months will be raised to 6% p.a.
- Principal amount of the loan will be repaid first. After that, interest will be paid in 2 monthly installment.
- When the loan is taken by the customer, the respective PPF account doesn’t earn any interest until the loan is repaid.
2. Pre-mature closure of PPF
- Pre mature closure is allowed only if there is change in the residential status or the account-holder want to take money out for the education of his dependent children.
- Documents needed : passport, visa, income tax return, college bills etc.
- Interest will be reduced by 1% in case of pre-mature closing of account.
- Pre-mature closing is allowed only after completion of 5 years.
3. Continuation after maturity
- Yes…!!! You can continue deposits even after maturity and that too, without any further deposits.
- But if you don’t deposit anything for more than a year, then you can’t make any further deposits.
- However, such account will be continued to earn interest.
- If customer wants to renew his account for further 5 years, then he has to either inform authorities or make some contribution within a year of maturity.
4. Maximum no. of deposit
- There is no restriction on the number of time customer can deposit.
- But, customer can not deposit more than ₹ 1.5 lakh in a single financial year.