PPF also has some Drawbacks. If you are going to invest in it, then you must also know about these Drawbacks.
PPF i.e. Public Provident Fund is a great scheme for long term investment included in the government’s short savings scheme. Not only do you get more interest on this than the fixed deposits of most banks, but by investing in it, you can also get a rebate of up to Rs 1.5 lakh in income tax. Apart from this, the money received on maturity will also be tax free. PPF account In this your money matures after 15 years.
On the other hand, for those who are not employed and want to take advantage of the provident fund scheme, the public provident fund scheme is run by the government. Any Indian citizen can invest in this scheme. The maximum annual limit for investing in it is up to Rs 1.5 lakh. As every coin has two sides, similarly everything has two sides. This scheme also has some Drawbacks. If you are going to invest in PPF, then you must also know about these Drawbacks.
your money gets stuck for a long time
One disadvantage of PPF is that this investment is for a long time. In this, you have to invest continuously for 15 years, after that your amount matures. In such a situation, your money gets stuck for a long time. Compared to this, mutual funds are considered much better in long-term investment because in this you get better interest than PPF, as well as you get the facility to withdraw money in between if you need it.
possibility of interest rate change
Talking about the interest rate on PPF, interest also gets affected with time. From April 2019 to June 2019, its interest rate was 8%, which is available today at 7.1%. If this interest rate decreases further in the coming time, then people will have many options which give better returns than this.
Maximum investment limit
The maximum limit of investment in PPF is Rs 1.5 lakh annually. If your salary is very good and you want to invest more in this scheme, then you cannot. In such a situation, you will have to find other investment options.
No joint account option
You do not get the option of joint account in PPF. Nor can a person open more than one PPF account. However, you can definitely make many nominees in it and decide their different parts as well. If the account holder dies, then the nominee has the right to withdraw that amount.