Public Provident Fund is a popular investment scheme in India due to its safe and guaranteed returns apart from tax free interest. It was introduced in 1968 in India. A PPF account comes under the EEE (Exempt, Exempt, Exempt) category. Best Financial Adviser Kuber Mindz Moneymindz says that you could stop getting PPF interest if you fail to adhere to the rules and regulations of PPF. Read further if you don’t want your PPF account being termed irregular.
Contributing below Rs 500 per year
Annually, a minimum of Rs 500 ought to be deposited in a PPF account and failing to do so can result in the account being considered irregular. This is because PPF is meant to encourage you to save and expects you to save a minimum amount.
Contributing above Rs 1.5 Lakhs per year
Annually, a maximum of Rs 1.5 Lakh can be deposited in a PPF account but exceeding the limit will result in the excess amount being treated as irregular subscriptions and no interest will be given for that. This is because PPF is a government scheme and gives free interest. Don’t overdo your investment.
More than one PPF account
You are allowed to have a single PPF account only. Apart from that, you can have a PPF account in the name of a minor provided he/she doesn’t have another PPF account in his/her name. You cannot co-own a PPF account with another adult. If such things are found, you will stop getting further interest.
Not naming a nominee
You have to appoint somebody as a nominee of your PPF account. Not doing so would be problematic in case you are no longer around at the time of PPF maturity.
Contributing after the maturity date
The lock-in period of PPF is 15 years after which you can extend the maturity of PPF by a block of five years through the submission of an application to your bank/post office. However, making further deposits after maturity period without notifying your bank/post office will result in the contributions considered irregular and interest and tax benefits will no longer apply for you.
NRI cannot open PPF account
If you’re a Non Resident Indian (or going to be one), know that you cannot open a PPF account once you are a non resident. However, if you already have an existing account when your residency changes, you are allowed to complete the tenure after which you cannot extend it.
For more information visit www.moneymindz.com or give a missed call to 022-62116588.