PPF or Public Provident Fund is a long-term savings scheme run by the central government. Post Office recently changed the rules related to a few small savings schemes. The rules related to PPF has been amended as well under it, with both 1968 Government Savings Certificates Act and 1959 Savings Promotion Act being amended.
In a single financial year, a person can deposit a minimum of Rs 500 and maximum of Rs 1.5 lakh in a PPF account. Earlier, the subscribers used to deposit an installment or a lump sum amount per month, but now more than one deposits can be made per month. To make a new PPF account, people will now have to fill Form 1.
Now, on the maturity of PPF, the scheme can get extended for a period of 5 years. Under this, either you can keep depositing or earn the interest on already invested sum. To continue PPF account with deposits, one will either have to pay a deposit before the end of a financial year or fill Form 4 instead of the old Form H.
After the completion of maturity period, if PPF account holders want to use the account without making further deposits, then the account holders will be able to withdraw only once every financial year.
After repaying the principal amount of the PPF loan, the account holder must pay interest at a rate of 1% per year on the principal amount in two monthly instalments. This payment is to be paid on the first day after the month in which the loan is taken and the last day of the last instalment month.
If the entire PPF loan is not repaid within the stipulated period, then the borrower will have to pay interest at the rate of 6% per annum.