Before making investment, you should consider the following rules.
You might have more time to invest.
The calculating date for maturity in most financial investments begins when you open an account or make your first payment/deposit. The 15-year lock-in term for PPF, on the other hand, is computed from the end of the financial year in which it was opened. This practically means that if you start investing in the middle of a fiscal year, you may receive more time.
For instance, if you deposits on May 20, 2021, lock-in period begins on March 31, 2022, and account matures on March 31, 2037. As a result, you will receive an additional 11 months from the date of first investment.
You can time your deposit to get a higher rate of return.
The interest calculation on the amount placed in a fixed deposit account begins immediately. The balance amount considered for interest calculations in PPF accounts, on the other hand, is the lowest between the 5th and the month's end. If you want to make monthly contributions to her PPF account, you should do so before the 5th of each month. This will result in a bigger balance in account, which will be used to compute interest, giving a higher return. Otherwise, interest will be computed on the sum from the previous month, which will be smaller, and would earn less. This may appear insignificant on a monthly basis, but over the course of 15 years, it might make a significant difference. One thing to keep in mind is that interest is only paid out at the conclusion of the fiscal year, in March. As a result, you must keep these dates in mind while depositing funds into her account.
You have the option of borrowing as well as making partial withdrawals.
Despite the fact that PPF accounts have a 15-year lock-in period, investors can make partial withdrawals and take out loans against them. All you have to do is keep certain requirements in mind. For example, can take a loan up to the seventh year, but will be charged an interest rate that is 1% more than the PPF interest rate. You will be eligible for partial withdrawals beginning in her seventh year, but not for a loan.
Even if you are an NRI, you can manage your PPF account.
A PPF account can be opened and operated by any Indian citizen. NRIs are not permitted to open new accounts. However, if they have an existing account that they started while in India, they can continue to use it, i.e. make regular deposits, until the 15-year maturity period has passed.
Your PPF money is only accessible to you.
One of the best aspects of a PPF account is that it is protected from debt collection. Even if a court orders the seizure of assets to satisfy a debt owed, a person's PPF account is exempt from such orders, ensuring that he or she has some income.
Comments