FPP investment strategy: For those who prioritize safe investments and seek to grow their assets in the long term, the PPF is an excellent option. Investors can contribute between Rs 500 and Rs 1.5 lakh annually, allowing flexibility depending on individual capacity. The PPF matures in 15 years and currently offers an interest rate of 7.1 per cent.
Apart from its attractive interest rate, the PPF scheme offers tax benefits in three ways: on investment, interest/yield and maturity. These features make it a popular choice among investors. However, there are some lesser-known details about this scheme that you should keep in mind:
You will continue to earn interest even after maturity
While the PPF scheme expires after 15 years, if you don’t withdraw the money after its maturity, there is no need to worry. Your funds remain completely safe and you continue to earn interest on the deposited amount. This interest is calculated according to PPF rules and tax exemptions still apply.
Investors have the flexibility to withdraw funds whenever they wish. They can withdraw the entire amount or withdraw only a portion, allowing them to benefit from future interest rates and keep the remaining balance in the account.
Extension options with ongoing contributions
If you want to maximize your earnings and build a larger corpus, you can expand your PPF account while continuing to contribute. The account can be expanded multiple times in five-year blocks.
How to extend your PPF account
To extend your PPF account while continuing to make contributions, you must submit a request to the bank or post office where your account is located. This application must be submitted within one year of the expiration date. You will also need to fill out a form for extension, which will need to be submitted at the same branch where your PPF account was opened.
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