PPF and Senior Citizens' Saving Scheme 2019

Questions and Answers

What is the maximum percentage of the balance that can be withdrawn for educational purposes?

100%

75%

25%

50% (correct)

At what age can an account holder first make a premature partial withdrawal?

16 years

18 years (correct)

20 years

21 years

How long is the maturity period for an account opened under the discussed terms?

15 years

18 years

21 years (correct)

25 years

Which of the following conditions allows for premature closure of the account?

Death of the depositor Signup and view all the answers

What is the maximum number of withdrawals allowed per year during the maximum withdrawal period?

1 Signup and view all the answers

What is the timeframe allowed for closing the account due to marriage?

Before 1 month from the intended marriage Signup and view all the answers

What type of interest is payable after the death of the account holder?

Post Office Savings rate Signup and view all the answers

Which form is used to apply for premature closure of the account?

Form-II Signup and view all the answers

What is the minimum amount required to open a Public Provident Fund (PPF) account?

Rs.500 Signup and view all the answers

Which of the following statements about the PPF account is incorrect?

Joint accounts are allowed under the scheme. Signup and view all the answers

What is the maximum deposit allowed in a Public Provident Fund account in a financial year?

Rs.1,50,000 Signup and view all the answers

What action must be taken if the minimum deposit requirement is not met in a PPF account?

The account is considered discontinued. Signup and view all the answers

How much fee is charged to revive a discontinued PPF account?

Rs.50 Signup and view all the answers

What is the current rate of interest for the PPF account as of Q2 FY 2024-25?

7.10% per annum Signup and view all the answers

Which of the following is NOT a restriction for a discontinued PPF account?

Partial withdrawals are allowed. Signup and view all the answers

Interest on the PPF account is calculated based on which of the following?

The lowest balance between the 5th day and the end of the month Signup and view all the answers

What is the interest rate deduction when an MTGD is prematurely withdrawn after a lock-in period of 3 years and it has run for 5 years?

0.25% Signup and view all the answers

Which statement accurately describes the option for receiving interest on a deposit?

Depositors can elect to receive simple or cumulative interest at the time of deposit. Signup and view all the answers

In the event of the death of a depositor before the lock-in period, which condition applies?

Interest payable depends on the deposit type and duration. Signup and view all the answers

What happens to the actual market value of a gold deposit upon premature withdrawal after a lock-in period?

It changes to reflect current market conditions. Signup and view all the answers

If an LTGD has a lock-in period of 5 years and runs for 10 years, what is the interest rate deduction?

0.375% Signup and view all the answers

Which of the following describes cumulative interest?

Interest that compiles and is paid at maturity. Signup and view all the answers

What is the treatment of interest on premature withdrawal of an MTGD after 3 years if the deposit has actually run for 6 years?

Applicable rate for MTGD minus 0.375%. Signup and view all the answers

What is the lock-in period for an LTGD to have a deduction of 0.25% when prematurely withdrawn?

12 years Signup and view all the answers

What is the maximum limit of subscription for individuals in the Gold Bond scheme per fiscal year?

4 kg Signup and view all the answers

Which of the following entities is NOT eligible to hold the Gold Bonds?

Registered NGOs Signup and view all the answers

What is the minimum investment amount in the Gold Bonds?

1 gram Signup and view all the answers

What is the minimum age requirement for an individual to open an account under the Senior Citizens' Saving Scheme 2019?

60 Years Signup and view all the answers

What form of payment is accepted for subscription to the Gold Bonds?

Cash up to ₹ 20,000 Signup and view all the answers

Which of the following is NOT a provision for opening an account under the Senior Citizens' Saving Scheme 2019?

Defence personnel who are active Signup and view all the answers

Which of the following is a designated Receiving Office for the Gold Bond scheme?

Post Offices notified by GOI Signup and view all the answers

What is the maximum deposit limit allowed in the Senior Citizens' Saving Scheme 2019?

Rs. 30,00,000 Signup and view all the answers

What is the application process for the Gold Bonds through online mode?

Online applications are allowed through the website of the listed scheduled commercial banks. Signup and view all the answers

Which individuals are explicitly excluded from depositing terminal benefits under the Senior Citizens' Saving Scheme?

Civilians of Defence Services Signup and view all the answers

What is the role of Receiving Offices in relation to the Gold Bonds?

They are responsible for servicing the Bonds. Signup and view all the answers

What is the maximum frequency of deposits allowed in a single account under the Senior Citizens' Saving Scheme 2019?

One deposit only Signup and view all the answers

What identification document is mandatory for investors in the Gold Bond scheme?

PAN card Signup and view all the answers

If an individual wants to open a joint account under the Senior Citizens' Saving Scheme, what is a key requirement regarding the age of account holders?

The age of the first account holder determines eligibility Signup and view all the answers

What is the time frame within which an individual who has retired must open their account to qualify under the Senior Citizens' Saving Scheme?

Within 3 months of receiving retirement benefits Signup and view all the answers

Which form is NOT associated with the operations of the Senior Citizens' Saving Scheme?

Form-II (Application for loan/withdrawal) Signup and view all the answers

What is the maximum number of girl children for whom an account can be opened in one family?

Two Signup and view all the answers

What is the penalty for maintaining an account under default for each year?

Rs.50/- Signup and view all the answers

How can a guardian operate the account until the account holder reaches 18 years of age?

On behalf of the account holder with necessary documents Signup and view all the answers

What is the minimum deposit required to keep an account active in a year?

Rs.250/- Signup and view all the answers

What is the maximum amount that can be deposited in the account in a financial year?

Rs.1,50,000/- Signup and view all the answers

At what point can the account holder start operating the account independently?

At the age of 18 Signup and view all the answers

What is the current rate of interest credited to the account at the end of the financial year?

8.20% Signup and view all the answers

What must be submitted along with the application to open an account?

Birth certificate of the child Signup and view all the answers

What is the primary intent of the Kisan Vikas Patra (KVP) scheme?

To promote long-term savings and investments Signup and view all the answers

What significant change was made to the KVP scheme upon its reintroduction in 2014?

Compulsory PAN Card proof for investments exceeding Rs. 50,000 Signup and view all the answers

Which type of account allows multiple adult account holders under the KVP scheme?

Joint A-Type Account Signup and view all the answers

Who can legally invest in a KVP certificate according to the eligibility criteria?

Any Indian citizen above the age of 18, including minors with adult aid Signup and view all the answers

What was identified as a risk associated with the KVP scheme that led to its initial closure in 2011?

Potential misuse for money laundering Signup and view all the answers

What is the minimum amount required to deposit when opening a KVP account?

Rs. 1000 Signup and view all the answers

Which type of Joint account under the KVP scheme allows for payout to any of the account holders upon withdrawal?

Joint B-Type Account Signup and view all the answers

What category of investments requires proof of income documents under the KVP scheme?

Investments above Rs. 10 lakh Signup and view all the answers

What is the minimum age requirement for an individual to open an account under the Senior Citizens' Saving Scheme?

60 years Signup and view all the answers

Which of the following statements accurately describes eligibility conditions for opening a joint account under the Senior Citizens' Saving Scheme?

The first account holder's age determines eligibility. Signup and view all the answers

What is the maximum deposit allowed in the Senior Citizens' Saving Scheme?

Rs. 3,000,000 Signup and view all the answers

Which form is utilized for applying to close an account under the Senior Citizens' Saving Scheme?

Form-III Signup and view all the answers

What is the minimum amount required to initiate an account under the Senior Citizens' Saving Scheme?

Rs. 1,000 Signup and view all the answers

In which scenario can a retired individual aged 55 open an account under the Senior Citizens' Saving Scheme?

If they open the account within three months of receiving retirement benefits. Signup and view all the answers

What is the interest rate on Sovereign Gold Bonds per annum?

2.50% Signup and view all the answers

Which group of individuals is explicitly excluded from depositing terminal benefits under the Senior Citizens' Saving Scheme?

Successors of deceased serving personnel Signup and view all the answers

What is the nature of deposits allowed in a single account under the Senior Citizens' Saving Scheme?

Only one deposit is permitted. Signup and view all the answers

How are the redemption prices of the Bonds determined?

Based on the average closing price of gold for the previous week. Signup and view all the answers

After how many years can premature redemption of the Bonds be initiated?

Five years Signup and view all the answers

What penalty is imposed for a delay in refunding rejected applications?

Repo rate +2% per day Signup and view all the answers

How often is interest on the Sovereign Gold Bonds credited to the investor's account?

Semi-annually Signup and view all the answers

What is the tax treatment of the capital gains tax arising from redemption of Sovereign Gold Bonds for individuals?

Exempted Signup and view all the answers

What is the duration of the maturity period for Sovereign Gold Bonds?

Eight years Signup and view all the answers

Which entity publishes the closing price of gold for calculating the nominal value of Gold Bonds?

India Bullion and Jewelers Association Limited Signup and view all the answers

What is the applicable interest rate deduction for a premature withdrawal of an MTGD if the lock-in period is greater than 3 years but less than 5 years and the deposit has been active for 6 years?

0.375% Signup and view all the answers

What happens to the interest on an LTGD if it is prematurely withdrawn after the lock-in period of 5 years and has run for 11 years?

Deduction of 0.375% Signup and view all the answers

In the case of death of the depositor before the lock-in period, what is the applicable interest rate for a deposit that has been active for less than 6 months?

Applicable interest rate as for premature closure Signup and view all the answers

What is the interest payable for an LTGD that has a lock-in period of 5 years after being prematurely withdrawn during the 8th year?

Applicable rate minus 0.375% Signup and view all the answers

If a depositor chooses to receive cumulative interest at maturity, what impact does this have on the payment of interest during the deposit term?

Interest is accumulated and paid at maturity Signup and view all the answers

What is the effect of a premature withdrawal on the actual market value of a gold deposit after the lock-in period?

It is based on the current gold market price Signup and view all the answers

For an MTGD that had a lock-in period of 3 years and is withdrawn after having run for just over 5 years, what would the interest deduction be?

0.25% Signup and view all the answers

What is the treatment of interest if an LTGD is closed before the lock-in period has lapsed?

No interest is paid Signup and view all the answers

Study Notes

Public Provident Fund (PPF) Scheme 2019

Formulated under the Government Savings Promotion Act 1873, officially notified on 12.12.2019.
Account can be opened only by resident individuals; joint accounts are not permitted.
Guardians can open accounts on behalf of minors or individuals of unsound mind.
Deposit minimum of ₹500 to open the account, with subsequent deposits in multiples of ₹50, capped at ₹1,50,000 per year.
A minimum deposit of ₹500 is required annually to maintain the account.
Failure to deposit the minimum leads to account discontinuation; revival possible with ₹50 fee per year of default plus arrears.
Interest rate set at 7.10% per annum, subject to change, credited at the end of the financial year based on monthly calculations.
Various forms required: Form-I (opening), Form-II (loans/withdrawals), Form-III (closure), Form-IV (extension), Form-V (premature closure).

Senior Citizens' Saving Scheme 2019

Notification issued on 12.12.2019 under the Government Savings Promotion Act 1873.
Accounts available to individuals aged 60 years and above or those aged 55 years who have retired within three months of receiving retirement benefits.
Joint accounts allowed, with one spouse or individually; the maximum deposit cannot exceed ₹30,00,000.
Requires a minimum deposit of ₹1,000 with no recurring deposits; only one deposit per account.
Loans are not permitted under this scheme.
Partial withdrawal for education is allowed after the account holder turns 18 years or passes 10th grade, capped at 50% of the previous financial year’s balance.
Maturity period is 21 years; closure permitted for marriage reasons under specific conditions.
In events of the depositor's death, funds transferred to the guardian; premature closure allowed for medical emergencies after five years.
Various forms used for account management include Form-I (opening), Form-II (premature closure), Form-III (withdrawal), Form-IV (closure).

Gold Bonds Investment

Bonds issued in gram denominations, with a minimum investment of 1 gram; limit of 4 kg for individuals and 20 kg for trusts annually.
Online applications available through scheduled commercial banks with a discount of ₹50 per gram for online applicants.
Subscription payments accepted in cash up to ₹20,000.
Cancellation of bond applications is allowed until the closure of the issue.
Investors can choose between annual or cumulative interest payouts; interest rates adjusted based on premature withdrawals post lock-in periods.
Specific interest rates apply based on the type of deposit and duration, adjusted based on market value and established percentage deductions for early withdrawal.
Important to complete KYC with a PAN and additional documents for all investments.

Opening of Account for Girl Child

Accounts can be opened by guardians for girl children under 10 years of age.
Maximum of two accounts allowed per family, with exceptions for twins/triplets upon submission of necessary documentation.
Each account holder may open only one account under this scheme.
Required documents include the child's birth certificate and guardian's identification.
Minimum initial deposit of Rs. 250, followed by multiples of Rs. 50, up to Rs. 1,50,000 per financial year.
Annual minimum deposit must also be Rs. 250 to keep the account active; failure to do this results in default.
Accounts under default may be regularized by paying a penalty of Rs. 50 for each default year.
Deposits can be made until the account holder turns 15 from the account opening date.
Guardians operate the account until the girl reaches 18, after which she can take control with proper documentation.
Current interest rate is 8.20% per annum, subject to change.

Senior Citizens' Saving Scheme 2019

Launched on December 12, 2019, under the Government Savings Promotion Act.
Accounts can be opened by individuals aged 60 and above, or 55+ if retired within three months of receiving benefits.
Defence personnel can open accounts at age 50; however, legal heirs of deceased personnel cannot deposit terminal benefits.
Only the age of the first holder counts in joint accounts; multiple accounts can be opened as long as the total deposit does not exceed the maximum limit.
Minimum deposit of Rs. 1000 required, with multiples of Rs. 1000, up to a maximum of Rs. 30,00,000.

Kisan Vikas Patra (KVP)

Initially launched in 1988 for farmers, now available for all citizens.
Resumed in 2014 with regulations to prevent misuse, such as mandatory PAN for deposits over Rs. 50,000.
Open to any Indian citizen over 18, as well as minors (with adult supervision).
Types of accounts include Single Holder, Joint A-Type, and Joint B-Type.
Minimum investment of Rs. 1000, with no maximum limit.

Sovereign Gold Bonds (SGB)

Nominal value based on the average closing price of gold for three previous business days.
Fixed interest rate of 2.50% per annum, credited semi-annually.
Interest payment applicable from application date until allotment date.
Maturity period of eight years; premature redemption allowed after five years.
Redemption price based on average gold prices published by the India Bullion and Jewelers Association.

Tax Treatment for SGB

Interest taxable under Income-tax Act.
Capital gains tax exempt on redemption.

Premature Withdrawal

Withdrawal after lock-in period pays actual market value of gold plus accrued interest.
Specific interest adjustments apply based on the type of deposit and duration held prior to withdrawal.

Death of Depositor

Interest payment structure varies based on whether the death occurred before or after the lock-in period, affecting payout calculations.

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Test your knowledge of the Public Provident Fund and the Senior Citizens' Saving Scheme as outlined in 2019. This quiz covers account opening procedures, deposit requirements, interest rates, and necessary forms. Perfect for those looking to understand government saving schemes in detail.