Public Provident Fund (PPF) is a small savings scheme of the government. The investor in this scheme gets guaranteed returns. Those investing in PPF can claim income tax exemption under section 80C of the Income Tax Act. A deduction of up to Rs 1.5 lakh can be availed in a financial year. Your investment amount in PPF is safe and you get great returns as well. Most of the people open PPF account during the job itself. But if an account holder dies before the maturity of PPF, then who gets his invested money in this situation?
How much return do you get?
At present, interest is being received at the rate of 7.10 percent on the amount invested in PPF. However, the government can change the interest received on this scheme every three months. PPF matures in 15 years, but it can be extended even further. The biggest feature of this scheme is that it gives returns on the basis of compound interest. This means that the more time you give to the scheme, the faster your money will grow. In this government scheme, you can invest at least Rs 500 annually and there is a limit of Rs 1.50 lakh for maximum investment.
Who gets the money?
Now suppose someone starts investing in PPF. Every month he is putting investment money in this scheme. But when the scheme reaches the term of eight years, the account holder dies due to any reason. In such a situation, the amount deposited in the PPF account is given to its nominee. In this condition, the rules of completion of maturity do not apply. After the death of the account holder, the entire money is handed over to the nominee. After this the account is closed.
How is claim settlement done?
As per the rule, the settlement of death claim can be done on several grounds. If the claim amount is up to five lakh rupees, the settlement can be done on the basis of nomination, legal proof or without legal proof at the discretion of the concerned authority. But for the amount of more than five lakh rupees, there is a need to apply legal proof. If the proof is not available with the nominee, then in this case the succession certificate has to be submitted from the court.
Can I withdraw money anytime?
As the maturity period of PPF scheme is 15 years. But the account holder can withdraw 50 percent of the investment amount in emergency. The condition for this is that one will be able to withdraw from the account only after 6 years of opening the account. Loan can be availed after investing in PPF account for three years. Loan facility is available from 3rd year to 6th year of account opening.