PPF Account: 5 compelling reasons that make April a special month for Public Provident Fund

Let us see why and how April is a crucial month for the PPF account holders.

For the Public Provident Fund (PPF), the first month of the new financial year, April, is an important month. PPF is a 15-year long investment, with the facility of taking a loan, partial withdrawals and even full exit before its maturity, subject to specific conditions. However, the PPF account holders need to know about certain things which are to be done in the month of April.

Let us see why and how April is a crucial month for the PPF account holders.

  • Know the interest earned

The interest rate on PPF is declared by the government at the start of each quarter. Once declared it remains fixed for the quarter. However, the interest is credited to the PPF account on 31st March every year. So, on April 1 each year, you get to know how much interest has your PPF account earned during the previous financial year. A PPF calculator may then be used to calculate the probable maturity amount.

  • Invest by 5th April and get full year interest

Try to invest before the 5th of April to earn full year interest. On deposits made after that date till the end of the month, the account holder fails to earn any interest. To earn full interest for the month in which you contribute towards PPF, make sure to do so before 5th of that month. The contribution need to be credited into your PPF account by this date. Illustratively, if you happen to invest in PPF on 6th May, the PPF account will get interest only for ten months.

  • PPF matures in April

A Public Provident Fund (PPF) account gets matured after the completion of 15 years from the end of the year in which the account was opened. So, no matter when you have opened your PPF account, the maturity will be in the month of April.

  • Option to extend

On maturity after 15 years, a PPF account holder has the option to extend the tenure for a block period of 5 years beyond the maturity period by submitting Form H within one year from the date of maturity. Such extension may be done indefinitely in a block of five years. As the maturity will fall in April, the option to extend with fresh contributions is available till April of the next year.

  • Default

In April or anytime after that if you realise that you had not invested even the minimum amount in PPF in the previous year, your PPF account would have turned inactive. A penalty of Rs. 50 will be levied per year of default if you do not deposit the minimum deposit amount of Rs. 500 on the completion of the financial year.

Responses

2 responses to “PPF Account: 5 compelling reasons that make April a special month for Public Provident Fund”

  1. ABY MARINE says:

    Kitna investment Karne se Kitna milta he…

    Send.. details

    • Kaushik says:

      For example, if you make annual payments of Rs.1,00,000 towards your PPF investment for 15 years at 8.0%, your maturity proceeds at the end of 15 years would be Rs. 31,17,276.

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