Public Provident Fund (PPF) scheme is a popular instrument of long-term investment option securely backed by the Government of India which offers safety with attractive interest rates and returns that are fully exempted from Tax. Investors can also avail facilities such as loans, withdrawal, and extension of account.
PPF accounts can be opened only by resident Indian Individuals and individuals on behalf of minors.
Well! This is a very good opportunity for both husband as well as wife. Many people are attracted by the PPF and Tax-free returns. Both husband and wife can open separate accounts. Anyone of them can open an account with the name of their minor child. This is a really good way and the entire family finances can be managed. In some cases, the housewife can generate some amount of income by a side business or other form. Also, people can earn a good ppf interest rate on their investment. The self income generation can help in opening the PPF account.
Some Important keynote point to discuss :
A person with income proof is someone who will possess a Pan Card. Hence, a Pan cardholder cannot open more than one PPF account in the same bank or the related bank.
Also, if an individual will deposit more than rs1,50,000 in one single financial year. He is the one who will not get any interest on the same amount. This will be an excess investment and the concerned person will be allowed to withdraw the amount at any time. Both the father and mother cannot open the account for the minor. The passing love of grandparents is always good and liked by children. However, grandparents cannot have a PPF Account for the minor child in case both the parents are alive.
Another Scenario :
1)We cannot have 2 PPF accounts
2) A housewife with a source of income can only open a PPF account
Let us discuss the 3 rd case in detail :
The husband can open a PPF account in the name of his wife :
1)It is possible to open a PPF account in the name of the non-working wife
2) A person can get extra security for the post-retirement life, with the long term returns on an average of about 15 years.
3) The total sum deposited in the wife’s account cannot be seen as the taxable income in FORM 16. However, on average, the overall money saved can be used for multiple number purposes like the kid’s education, marriage, and even your own business.
Some key shots to maximize your returns in a PPF :
- Well, no doubt that a PPF account is flexible. A typical pattern is seen in which people can deposit the money in installments or at the end of the tenure. Instead, those who have extra money and wish to open two accounts can save the money at the starting of the year, invest the entire amount in one shot before and that too before 5th April. This way you can earn more interest on the same amount
- For a better and faster way, it is implied that people should deposit the money through an online source as compared to the form of a cheque or any other form.
- These little details should not be ignored. If you deposit the amount later than the April, 11-month interest will be only credited. The lowest balance is taken into consideration. The date of attention can usually lie between 5th to the 31 st. Our primary concern is that you should earn the interest for April and the other 11 months on the PPF account.
Here are a few features of PPF account:
- An attractive interest rate of 7.1% and entirely exempted from Tax under Section 80C.
- Excellent long-term investments of 15 years.
- The deposit amount can be as low as Rs.500 to a maximum Rs. 1,50,000 for every year. Deposits should be made in multiples of Rs.50.
- Loan on PPF can be availed anytime between the 3rd and 6th financial years.
- After completion of 5 fiscal years, a partial withdrawal facility is available.
- The account can be extended in a block period of 5 years after maturity.
- Deposits to Public Provident Fund (PPF) Accounts can be made in the form of cash, cheque; online funds transfer from the savings account, and fund transfer from other bank accounts through NEFT.
As housewives save many every month, which makes PPF the best investment option for them. The reason why public provident fund continues to be favorite of housewives because, it is long term investment, second it is one of the safest investment options, the third value of investing money can be modified.
- Convenient to Pay: The minimum number of housewives can open the PPF account is minimum Rs. 500/- respectively. And the investment amount can go up to 1.5 lakhs. Housewives who struggle with cash flow and want to invest in some valuable investment then PPF is the best investment gateway.
- Safe and Reliable: Many housewives unwilling to spend in the investment options because they think their money will be at risk. But PPF is one of the safest and reliable investment options. As the fund in the PPF account is levied by the central government, there will be no default in the investment.
- Better Returns: Many years ago, the PPF account gave a fixed return at the time of maturity period, but now it has become flexible. As per the government guidelines, the rate of the assured return would be 8%. You can always use a PPF interest calculator to determine the return that you can earn on a PPF investment.
- Some Other Advantages: Being levied by the government. It is one of the most popular and safest investment schemes. So, there will be no fear of losing money. The only scared side of the PPF is the lock-in period. If your housewife has a patience level to investment for 15 years, then go for this option.