March 17, 2012 11:58 am
Can I invest 1 lac in PPF in april 1, 2012 as tax saving investement for FY 2012-13
This may be very basic question .. I hold PPF account in Postoffice. After 4 years it will complease 15 years. Is it possible to close it withdraw all the money and open new PPF account in State bank of India ?
Yes it is possible.
However you must keep extending your exisitng PPF for block of 5 years becaue the entire corpus will earn interest tax free from 16th year. You can contribute more as well.
If you want to transact with SBI for the ease of access across India/online you can do a transfer of the account from a Post office to any SBI branch even now wihtout waiting for 4 years.
Dear Yogesh, for your situation my take, please transfer your PPF account from P.O. to SBI now. Once the initial 15Y period is over, apply for extension of 5Y & thus keep on extending 5Y every time as per your need.
After 15 years you can extend it for a block of 5 years apiece. If you dont decide to do anything then you can make fresh contributions later (say 18th year)
One more doubt. After 15 yrs, PPF acct wil get closed automatically or it will become inactive so that we can use the same account later on. Also can we use same PPF account for block of 5 years after some gap .. say after 18th year, or we again will have to do it for 15 years?
Changes are made to EPF. PPF for now is untouched. The interest for PPF remains same “8.6%”.
PPF after 15 years. Yes you can continue. It will be in block of 5 years. Meaning after 15 years you can extend it to 20 years then 25 years.
Are there any changes in PPF interest rates recently? What is current Interest that we get? Can we continue PPF acct after 15yrs also or it gets terminated?
Dear AB, for current FY, the interest rate for PPF is 8.6%, for next FY i.e. 2012-13, it ‘ll be declared on 1sy april, 2012.
After completion of initial 15Y period, you may renew your existing PPF account for a blcok of 5Y every time till you wish so or you are alive.
To avail this 5Y renewal, you w’d have to inform to the bank branch/PO where your PPF account is maintained. Failing to do so, ‘ll invite closure of your PPF account & you w’d have to withdraw money from this account.
Thanks a lot. Your comments are very helpful. I will get back with more questions… bye for the moment.
Asset Allocation plays a key role in determining wealth creation. Some people can complete the needed investments in 80C by a combination of Term Insurance, EPF and VPF alone. Even for such people, though not from a tax perspective, investing in PPF still makes sense as EPF, (VPF) and PPF alone can be significant part of the Debt portfolio. Add a few debt funds and tax free bonds and you dont usually have to look beyond for the debt portfolio.
Couple of very positive points at your end.You have assured Job till 65. Many IT guys dont not know what will be thier future tomorrow. Comming to the main point… You still have time in your hand…
Just to give you quick update on MF: when invested for long term MF have given returns of CAGR. Fund Manager will do all the buying for you. You dont have to know details of stock market. Yes i would say, it would be good if you review/read some articles that explains potenatial of MF.
Good Funds :
ELSS – HDFC Tax Saver AND ( Fidelity Tax advantage or Can Robeco ). This will give you tax exemption also.
Equity Funds : HDFC Top 200 and Franklin India Blue Chip. If i am too choose only one then i would go with HDFC Top 200.
As i mentioned for any Debt investment i prefer PPF. Do continue your investment, along with exposure to MF.
Couple of suggestions :If you dont have term plan, buy one if you have depenents. Never invest in endowment policies. Say No to Ulip and Strict No to Pension Policies….
For your Retirement : Invest in MF+ PPF
I am 47 and has job upto 65. My money is always badly managed, as I never concentrated on it. My PPF started on FY 2000-01. So I have only 3 years more of investment opportunity in PPF. On the other hand I have PF where my annual subscription is approximately 60 k. I also have LIC. So I am not really looking at PPF as tax saving scheme. Is it not a good investment for people like me, who is a dummy in MF, stocks etc? I will wait for your suggestions.
Kindly tell me about the best MF at this moment, so that I can start. Do I need to have a Demat a/c?
Start investing in Canara Robeco ELSS through SIP from this FY.
No need of demat account.
As JGMM said, 5th April is best time. This will maximise your return. i am just curious to know why do you want to invest 1 lakh in PPF only? Dont you have EPF and other investments that are part of 80C?
Why not invest a portion of 1 lakh into ELSS? In ppf you will have to wait for 15 year.
If you give 15 year time for your money in MF, you may get better returns.
P.S i am great fan of PPF when it comes to debt instrument.
If possible deposit this on April 5 because this money can earn interest for 4 days in your SB account and thus you can maximize the return on PPF as well.
Yes, you can do.
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