PPF max limit is for 15 years, what about compound interest after that?

POSTED BY DeepakB12 ON September 29, 2013 4:46 pm COMMENTS (3)

Hi,

I have been reading here that instead of taking Life insurance policy, better go for Term plan+ PPF

My query here is- we can add amount in PPF account till 15 years. After that, as per my understanding, we will have to withdraw that amount and re-invest it in some other things, if we are saving for retirement purpose. However, Max limit is 1L which can be put in PPF account. My point is lets say I put 2000/-pm in PPF for 15 years.. and I get around 10L after 15 years. I will have to withdraw that 10L amount and won’t get compound interest on this amt after 15 years. A new PPF account will help for max 1L rupees.

Instead if I take a Jeevan Saral LIC policy, even after 15 years I will keep getting interest on whole amount accrued. Correct me If I am wrong here.

This is what I feel huge gap between life insurance policy and PPF account.

Please comment.

3 replies on this article “PPF max limit is for 15 years, what about compound interest after that?”

  1. ashalanshu says:

    Dear Deepak, how about purchasing this SARAL now and comparing the 2 things after 15Y?

    thanks

    Ashal

  2. basunivesh says:

    In case of PPF as Bknaresh told you can extend it for a 5 year block and this option is not available with Jeevan Saral. In Jeevan Saral if you opted for 25 years then you can’t extend it.
    Second thing even though you feel that you are earning from Jeevan Saral, but you will receive returns only on maturity and that too without compounding. Whereas in PPF it is the yearly compounding. The difference is huge when you go for long term comparing Jeevan Saral to PPF.

  3. bknaresh says:

    You can continue your ppf account after 15 years by extending it every 5 years block. Even if you do not continue to contribute, you are entitled for compounded interest upto previous month of withdrawal @ prevailing ppf interest rate.

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