An employee has to bear a lot of expenses altogether. It becomes more significant for those who are the sole earning member of the family living with ailing parents. Moreover, there are a few expenses that you need to pay where putting little money asides becomes the real challenge. Hence you will need to know about the public provident fund that will help you save a bit. However, you will need to know about the rates and schemes before you finally land on them.
A brief keynote in public Provident Fund
Before you finally sign the papers, you might need a clear idea about what is public provident fund. There are also a few schemes and rates that will cater to your need, and you will also need a clear idea. The public provident fund was first introduced in the year 1935, and that is currently managed by the Employees provident fund organization (EPFO) administered by the government of India. You need to know that the provident fund is the amount you will be charged based on the amount you earn, and that can only be withdrawn after a certain period. The purpose of the provident fund is to help employees regulate their monthly income after the time of retirement.
A few benefits of public provident fund
You need to know that provident have been made mandatory who will fulfil at least 15,000 thresholds of income. under section 80C, an employee can get about 1.5 lakh of income tax exemption in a financial year if they get signed with PPF. Thus, you will need to know about a few benefits of having a Public provident fund.
Loan against PF
Having a PPF account is a wise idea, as, during the time of an emergency, you can get a loan against your PF account. Once get the loan is paid, it will be paid within 36 months after the loan disbursal.
In the most unlikely event the employer dies during the service, the individual becomes eligible for 6-7 lakh of free insurance.
Enhanced loan repayment
If you have an issue repaying the loan, having a provident fund account will be a wise idea. You can use your PF account to repay your loan.
A few schemes of the Provident Fund
Under the act of Employers provident fund act 1952 in India, you are eligible for PF once you get to earn a certain amount. Well, be that as it may, there are indeed a few schemes that you need to know.
- EPF Scheme 1952: Under this act, the one who caters EPF account will be able to use the accumulated money only after retirement.
- Employees pension scheme: Under the employer pension scheme act 1952, the Public Provident Fund account becomes the only source of superannuation pension. Under this act, the widow or widower’s pension or orphan is payable.
- Employees’ Deposit-linked Insurance Scheme, 1976: Employees’ Deposit-linked Insurance or EDLI scheme is the one that provides insurance benefits to the employer of an organization.
Ways to open a public provident fund account online
If you are considering opening a Public Provident Fund account, you will need to know how to open a PPF account. You need to know that, as an individual, you are allowed to open a PPF account online. You need to know that it is the most plausible option to understand and have a look at your funds in it. Opening an account also helps in making decisions with your money. Knowing wise guidance for opening a PPF account online is a wise thing to do.
A step-wise guidance
- The first thing you will have to do is log in to a banking portal.
- The next thing that you will have to do is to opt for the option where you get the option to choose which tells you to open a provident fund.
- Then you can start opening a PPF account by entering a few details like the name of the nominee, details of the bank, PAN number, account number and other details of the account holder.
- After all the details are put into the needful part, you will need to know the amount that must be deposited. For that, you will need to follow the instructions that need to be followed as there are the certain amount that you must put into the PPF account.
- Well, after that, there will be the IV verification, for which you will have to put the OTP that you will get in your registered phone number.
- Once you are done with it, you are ready to open your Public Provident Fund account.
The final thoughts
Now that you have a clear understanding of what is public provident fund it will be a wise idea to take guidance from an expert there; you will get a piece of detailed information about it. It is suggested to go through it before you make any final decision.