Investment In PPF

POSTED BY Rahul Sureka ON June 25, 2013 9:56 am COMMENTS (5)

Hi..I want to start investing in PPF as the financial year has already been started. I was thinking to start investing from July Onwards. I want to know Is it a good time to start investing from July?

And also as i have seen in one of the Manish forum regarding PPF where is mentioned in Case 1 that lumpsum investment is Good. So shall i invest lumpsum in between 1st july to 5th july for whole year OR i invest monthly wise?

Please Suggest me what to do? I should invest OR not. Is PPF investment is Good OR i go for Tax Saving FD which given 9.00%.

5 replies on this article “Investment In PPF”

  1. Bunker Guide says:

    I am of an opinion that youngsters as soon as they join a profession or job, proceed towards a bank which offers PPF and open one account for themselves (if not already opened by their parents). They should also open a PPF account in their spouse’s name if spouse does not have one opened by their parents.
    If some youngsters feel that PPF has a 15 yrs horizon and they dont have any goal for 15 yrs and have not planned then I suggest that you create a new goal of 15 yrs that “you will need x amount after y yrs where y is greater than 15” but please open PPF account.
    As soon as kid is born or aged 1 year, open a PPF account for their educational fund which can be used when kid turns 16-17.
    Tip: As already mentioned earlier by Ankush, please deposit maximum amounts earlier in the financial year to gain higher interest.

  2. Anshuk Jain says:

    To answer your real question, invest in PPF as soon and as much as possible. You will get much higher interest that way. I invest 1 Lakh in April 1st week itself..

  3. Dear Rahul, please do not open PPF account or tax saving FDs. First of all invest your time in reading past discussions here in the forum.

    Thanks

    Ashal

  4. Tax saving FD and PPF are apples are oranges wrt duration taxation etc.

    Unless you are clear about what you want to invest it will be difficult to decide. First finalize your goals and integrate your tax savings with those goals.

    PPF is a good investment only if your goal is 15 financial years away.

    Yes you can open in July. You can make a contribution each month. Just ensure you invest before 5th of each month.

    the difference bet investing monthly and lumpsum should not be significant. Do what suits you best

  5. bemoneyaware says:

    A question you need to ask is Why are you investing in PPF?

    Features of PPF are given below.Our post Understanding Public Provident Fund, PPF explains PPF in detail :

    PPF works on financial year basis (April 1st – March 31st).
    It is long term investment for 15 years
    The interest rate is around 8% currently 8.80% p.a.
    You need to deposit a minimum of Rs. 500 per year in a PPF account.
    Maximum amount which you can deposit in a PPF account is Rs. 100,000. (Earlier limit was Rs 70,000 it was increased to 1 lakh from 1.12.2011 )
    You can deposit lump sum or multiple installments.
    Maximum number of installments in a year can not be more than 12.
    Amount of each installment in a month and also in different years can vary.
    Ex: In a year one can remit Rs 500 in month of Apr, then 2000 in month of July, 5000 in month of Mar. In the next year one can pay Rs 5000 in month of Jun.
    Contribution in PPF can be claimed upto 1,lakh per year under section 80C. On maturity the proceeds are tax free.

    Tax saving FD
    Tenure – 5 years (lock in period)
    the deduction from income under section 80C available upto 1 lakh
    Interest on Tax Saving FD is taxable so 9% for person in 20% tax slab boils down to approximately 7%.

    Investing is a plan a personal plan. When you are planning to invest in any financial instrument check whether liquidity, tax,risk, returns match your expectation. Our articles Goal based investing , Investing:Think about Liquidity,Safety,Returns,Risk,Tax discuss it in detail

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