What is Public Provident Fund PPF?
Public Provident Fund PPF is a guaranteed return savings scheme established by the Govt. of India with 15 years maturity period. People who are investing in PPF knows quite well that maximum permissible investment limit in PPF in a financial year is 1.5 Lakhs and that this amount invested is eligible for a tax benefit under 80C of income tax act.
Crucial Information about Public Provident Fund PPF
List below are 3 things about Public Provident Fund PPF investment that many of us might not be aware of. Specially the 3rd point might be something new for most of us and the knowledge might help plan our finances better.
1. PPF Returns are assured but floating
PPF Returns are assured but floating. Even though the returns are assured, the rate of interest can be changed every quarter.
2. Investment post 5th does not get the interest for the month
Amount invested by 5th of the month receives interest for the month.
3. The maturity date is calculated 15 years from the start of the next financial year
Whenever the account is opened, the maturity date is calculated 15 years from the start of the next financial year. So, in certain cases, it becomes a 16-year maturity product instead of 15 years. The following example will help you understand the point better
Example: If you open a PPF account on 31st March 2022, the date of maturity would be 15 years from the start of next financial year. i.e, 1st April 2022 + 15 Years = 1st April 2037
Now, what if you open the account just a day later, that is on 1st of April 2022. The date of maturity would be 15 years from the start of next financial year. i.e. 1st April 2023 + 15 Years = 1st April 2038. So, for a difference of just one day in account opening the Date of Maturity is delayed by 1 Year and here it becomes a 16-year maturity product.
Did you know these? Now that you know, plan accordingly. Informed actions related to your personal finance make your money work for you.
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Disclaimer: The ideas and thoughts expressed in this article are not any kind of investment advice intended to influence anybody to take investment decisions. Please note that the numbers shown in the article are not accurate and might vary as per the changes in income tax rules from time to time. Please consult your advisor before taking any investment decision.
