PPF Account Deposits can be made in installments or as a lump sum amount. Read the article to know more about PPF investment.
The Public Provident Fund (PPF) is a type of investment that allows you to save for your future. The PPF account can be opened in any nationalized bank, and it has the benefit of tax exemption on interest earned. This means that all interest on the deposited amount will be yours to keep without having to pay taxes on it. In this article, we will discuss whether we can enter Different PPF Amount Deposit Every Month.
Overview of PPF Accounts
PPF stands for Public Provident Fund. It is a special type of savings account that offers tax benefits to its investors. PPF is a safe investment option with guaranteed returns and an assured return of the principal amount at the end of the tenure. The maximum amount that can be invested in one year is ₹1,50,000 i.e (₹500 per month). The minimum investment period for PPF Account is 15 years and it can be extended further up to another 5 years if you want to continue your investments in this scheme after the maturity date.
In order to calculate the profits you will get after investing in your PPF account for the tenure, you can use the PPF calculator by Vakilsearch. After entering the basic details it will easily show you the maturity amount for the returns you will get at the given interest rate and the amount you are investing.
How to Deposit Into PPF Accounts?
The PPF is a long-term investment, which is the best option for you to save money. The PPF account has many benefits and interest rates are very high. You can deposit any amount of money within the limit as PPF account deposit are not taxable. So this is one of the best options for your savings.
You must have an Indian bank account with a minimum balance of ₹500/- at least once in 3 months before opening a new PF Account.
Before opening a PPF account, you should be
- An Indian citizen and
- Have an active bank account.
When you open a PPF account, you have the option of depositing money in lump sum or installments. If you choose to deposit money in installments, then you will have the option to make monthly deposits or quarterly deposits depending on your convenience.
If you want to calculate the returns on your PPF account deposit and the maturity amount you will get at the end of the tenure, you can use the PPF calculator provided by Vakilsearch. This calculator will help you know the amount that you will get after investing for the entire tenure. You have to enter the investment amount along with the tenure and the interest rate and you will know the return you will receive.
Lump-Sum Deposits
To get the tax benefits and the interest benefits from PPF accounts you have to deposit a minimum of ₹500 in a financial year. This money can be deposited every year as a lump sum or in monthly installments. In this section, we will talk about lump sum deposits made into PPF accounts.
PPF account deposit in lump sum are a very good investment option for middle-class people. The reason behind this statement is, you can save money and earn interest on your deposits by investing in PPF. It’s not like other schemes where you have to invest small amounts of money regularly to get the benefits. You can deposit large sums of money at one go and then forget about it until the maturity period comes.
If you are planning to invest the money in PPF accounts for tax exemption and to get interest on that invested money you are allowed to deposit it once every year and the interest is added to it at the end of every financial year. Financial experts suggest that you submit this lump sum amount before the 5th of April of each year to get maximum benefits.
Here are some benefits of depositing the amount as a lump sum into your PPF accounts every year.
- It is easy for a lot of people to set aside money every month and deposit it at once. In case an individual needs that money they set aside for some emergency they have it with them. This is a great feature that PPF accounts offer and it can be very useful for middle-class people.
- Depositing money as a lump sum amount every financial year makes it easy to calculate. An individual need not go through the process of depositing the amount every month instead they can just submit it at once and get the same interest benefits.
Installment Deposits
Along with the option of depositing the amount as a lump sum, PPF also allows an individual to deposit the investment amount in installments every month. The amount deposited every month should be multiple of 50 and should not exceed ₹1.5 Lakh. Depositing the amount in installments can be beneficial for people who prefer submitting a small amount every month and can manage their budget according to it.
As the Starting amount of PPF accounts is very minimal, depositing money in installments can be a great option for people with lower incomes as it allows them to take small amounts of money every month and invest it.
If you plan to deposit money to your PPF account every month in installments then it is suggested that you do so before the 5th of every month. This way you will be able to get maximum interest benefits.
FAQ’s:
Can I invest different amount in PPF?
Yes, you can invest any amount between Rs. 500 and Rs. 1.5 lakhs per year in your PPF account. You can choose a fixed amount or make multiple deposits throughout the year.
Can I deposit 2 times in a month in PPF?
Yes, you can make two deposits or even more in a month in your PPF account. There is no limit on the number of deposits you can make as long as the total annual contribution doesn't exceed Rs. 1.5 lakhs.
How much can I deposit in multiples of PPF?
The deposit in a PPF account has to be in multiples of Rs. 50, subject to the minimum and maximum limits.
Which is better to deposit monthly or yearly in PPF?
It is better to deposit yearly in PPF as it ensures that the account earns interest for the entire year on the maximum balance.
Is it better to pay PPF monthly or yearly?
It is better to pay PPF yearly to maximize the interest earned on the account balance.
Can I deposit more money in PPF?
No, the maximum annual deposit limit in a PPF account is Rs. 1.5 lakh.
Can I hold 2 PPF accounts?
No, an individual is allowed to hold only one PPF account, except for a PPF account that is opened on behalf of a minor.
What happens if I deposit 2 lakhs in PPF?
If you deposit more than the maximum limit of Rs. 1.5 lakh in a PPF account, the excess amount will not earn any interest and will not be eligible for tax benefits.
Is it possible to change the amount that has been declared in a PPF account?
No, you cannot change the amount declared in your PPF account once the financial year is over. However, you can choose to invest a different amount in the next financial year.
Which is better Sukanya or PPF?
Both Sukanya Samriddhi Yojana (SSY) and PPF are good long-term investment options. SSY is specifically designed for the girl child, while PPF is open to everyone. The choice between the two depends on the specific financial goals and requirements.
Can I invest lumpsum in PPF?
Yes, lump sum deposits are allowed in a PPF account, subject to the maximum annual limit of Rs. 1.5 lakh.
Is PPF tax free?
Yes, the interest earned and the maturity amount of a PPF account are both tax-free.
What happens if I don't deposit money in PPF account?
If you don't deposit the minimum amount of Rs. 500 in a financial year, your PPF account will become inactive. You can reactivate it by paying a penalty of Rs. 50 for each inactive year and the minimum deposit amount for each inactive year.
Which is more profitable FD or PPF?
PPF is more profitable than FD in the long run, as it offers higher interest rates and tax benefits. However, FD provides more liquidity as the investment period is shorter.
Can I withdraw money from PPF?
Yes, partial withdrawals are allowed from the 5th financial year onwards, subject to certain conditions. Full withdrawal is allowed after the maturity period of 15 years.
Conclusion
PPF is an investment scheme that allows citizens of India to invest a part of their income and get interest on it. The PPF account deposit and the maturity amount received are exempted from tax.
The amount in PPF can be deposited in a lump sum before 5 April of each financial year or it can be deposited in installments before the 5th of every month.
The PPF calculator by Vakilsearch is one of the best tools that allows you to calculate the return on the amount you invested in a PPF account and helps you manage your finances accordingly.
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