Provident fund saving is an investment scheme among investors courtesy its multiple investor-friendly features and associated benefits. It is a long-term investment scheme popular among individuals who want to earn high but are also looking for stable returns
Last Updated Date: May 16, 2022
Sanima bank is one of the developed, strong and reliable banks promoted by the prominent and dynamic businessmen of the Non-Resident Nepalese (NRNs). It obtained an operating license from Rastra Bank of Nepal and started operating in 2004. Sanima Bank has 27 full-fledged branches inside and outside the Kathmandu valley to provide its customers with a banking financial solution and plans to develop even more facilities in different parts of the country. Sanima Bank Limited started its activity in 2004 as a National Level Development Bank. Sanima got the working permit from Nepal Rastra Bank to work as A Class Commercial Bank in 2012. Sanima has 79 undeniable branches and one expansion counter inside and outside the Kathmandu Valley and has further designs to extend its scope in the different piece of the nation.
A provident fund is a compulsory, government-managed retirement savings scheme used in Singapore, India, and other developing countries. In some ways, these funds resemble a hybrid and Social Security used in the Nepal. They also share some traits with employer-provided pension funds. Workers give a portion of their salaries to the provident fund and employers must contribute on behalf of their employees. The money in the fund is then held and managed by the government, and eventually withdrawn by retirees or, in certain countries, their surviving families. In some cases, the fund also pays out to the disabled who cannot work. Public provident fund is a popular investment scheme among investors courtesy its multiple investor-friendly features and associated benefits. It is a long-term investment scheme popular among individuals who want to earn high but are also looking for stable returns. Safety of the principal amount is the prime target of individuals opening a PPF account.
A Public provident fund scheme is ideal for individuals with a low risk appetite. Since this plan is mandated by the government, it is backed up with guaranteed returns to protect the financial needs of the masses in India. Further, invested funds in the PPF account are not market-linked. Investors can also undertake the public provident fund regime to diversify their financial and investment portfolio. At times of downswing of the business cycle, PPF accounts can help with preserving your capital.
The key characteristics of a public provident fund scheme can be listed as follows –
A PPF account has a lock-in period of 15 years on investment, before which funds cannot be withdrawn completely. An investor can choose to extend this tenure by 5 years after lock-in period is over if required.
A minimum of Rs. 500 and a maximum of Rs. 1.5 Lakh can be invested in a provident fund scheme annually. This investment can be undertaken in a lumpsum or installment basis. However, an individual is eligible for only 12 instalments into a PPF account in one financial year. Investment in a PPF account has to be made every year to ensure that the account remains active.
Public provident funds provide the benefit of availing loans against the investment amount. However, the loan will only be granted if it is taken at any time from the beginning of 3rd year till the end of the 6th year from the date of activation of the account. Only 25% or less of the total amount available in the account can be claimed for this purpose. You will have to repay the loan in 36 months.
Rumsan is a diversified multi-business company. We are committed to supporting promising start-ups and investing in digital innovation.
