PPF New Rules: If you are looking for a safe investment, this news can help you. That’s why, when it comes to completely safe and government-guaranteed investments, the first name that comes to mind is PPF (Public Provident Fund). But is simply opening an account and depositing a little money every year enough?
In fact, PPF is not just a savings scheme, but a way to gradually grow your money and build a large fund for the future. Let’s learn about 5 important aspects of PPF that people often don’t talk about:
The Big Role of Dates
People often invest in PPF only at the end of the month after receiving their salary. This is the biggest mistake. PPF interest is calculated on the minimum balance between the 5th and the last day of the month. Therefore, if you deposit money after the 5th of the month, you will not get interest for that entire month. For good returns, deposit between the 1st and 5th of every month.
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Loans are also available on PPF
Many people don’t know that you can also take a loan against the money deposited in your PPF account. This facility is available between the third and sixth years of opening the account. The interest rate on the loan is very low (PPF interest + 1%). This means it is the safest and cheapest option compared to expensive personal loans in the market.
The Safest Way to Save Money
The money deposited in a PPF is legally completely safe. If you ever get into debt or become bankrupt, the court or bank cannot touch your PPF money. This security is not available in mutual funds or fixed deposits.
15 Years is Just the Beginning
People think that PPF ends after 15 years, but the real benefit starts then. After 15 years, you can extend it continuously for 5-year periods. Investing for a longer period makes your money grow faster. You can consider it a strong fund for retirement.
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Accounts in the name of children
You can also open a PPF account in your children’s names. This secures their future. When the children grow up and need money for college or business, they will have a substantial tax-free fund ready. PPF falls under the EEE (Exempt-Exempt-Exempt) category, meaning there is absolutely no tax on the investment, interest, and maturity amount.
Important Tips
Take full advantage of the tax exemption of up to ₹1.5 lakh under Section 80C of the old tax regime.
Do not forget to nominate a beneficiary when opening the account, as withdrawing money can be difficult without a nominee.
Investors should deposit money into the PPF scheme before the 5th of the month.
