The Economic Times
English EditionEnglish Editionहिन्दी
| 09 March, 2021, 09:34 AM IST | E-Paper

    Voluntary Provident Fund (VPF) vs Public Provident Fund (PPF) - Which suits you better?

    Both VPF and PPF carry sovereign guarantee and hence, there is no difference when it comes to risk. Both are considered to be safe fixed income investment options. The decision to invest should be based on one's goal and time horizon.

    NPS vs PPF investment: Where should you invest to save for your retirement?

    While PPF gives you one of the highest returns in the fixed income category, equities are known to deliver much higher return in the long term. Looking at the historical return, one can see that when it comes to absolute return, PPF cannot match up to the returns delivered by NPS so far which are mostly in double digits.

    Inactive PPF account? Follow this process to reactivate it

    In the fixed income space, the Public Provident Fund (PPF) is a popular investment avenue among investors. A PPF account allows individuals to invest up to Rs 1.5 lakh each year and also provides a tax deduction under Section 80C of the Income Tax Act. The account has a validity of 15 years and the account holder is supposed to deposit a minimum of Rs 500 every financial year.

    No cut in PPF, NSC, other post office schemes' interest rates for Q4 of FY 2020-21

    This was announced by the finance ministry via a circular dated Dec 30, 2020. As per the circular, PPF will continue to earn 7.10%, the NSC will fetch 6.8%. Here is a look at the interest rates on various small savings schemes for the final quarter of FY 2020-21.

    MF portfolio doctor: Why Kumar needs to reduce number of mutual fund schemes in his portfolio

    The mutual fund portfolio doctor offers advice based on the health of the investment portfolio, their suitability with regards to money goals and recommends corrective measures if any.

    I will retire next year with retirement corpus of Rs 1.5 crore. How should I invest this money?

    For generating your post-retirement income, you should follow the bucket strategy. Do remember to invest some part of the retirement corpus in equity mutual funds to ensure growth.

    Can I split PPF investment money between my account and my minor son's account?

    Under the PPF Scheme, 2019, Rule-3 sets the limits on the number of accounts which an individual can open. The rule allows opening of one’s own account, and also on behalf of minor or a person of unsound mind of whom he or she is the guardian.

    PPF stays out of tax on EPF interest

    “The cap is not applicable on PPF because there is already a limit of ₹1.5 lakh contribution in a year to PPF,” the official said. The government has proposed changing taxation rules for provident funds by levying income-tax on the interest earned on contributions exceeding ₹2.5 lakh in a financial year.

    I have two PPF accounts. What is the maximum tax benefit I can claim on both accounts?

    The ceiling for deposits to individual self account and minor account(s) to whom one is guardian, is currently capped at Rs 1.5 lakh in a financial year. Any transaction over and above this amount should ideally be rejected by the bank.

    Tax on PF interest: Should you stop investing in VPF? How bank FDs, RBI bonds, NPS compare

    Many contributors to VPF are now exploring other options that can give them higher returns. Almost 74% of respondents to our survey say they will restrict their Provident Fund contribution to Rs 2.5 lakh a year and invest the remaining in some other investment option.

    Should you switch from tax free bonds now? These two factors should help you decide

    “If your holding in tax-free bonds is small, switching to PPF is the best option. Sell slowly and invest Rs 1.5 lakh per annum in PPF,” says Anil Rego, Founder & CEO, Right Horizons. In addition to the tax free status, current returns (7.1%) offered by PPF is also good.

    Can a returning NRI open a PPF account?

    A recent rule allows an account holder to pre-close the PPF account on change in residency status. Irrespective of the residency status on maturity, the proceeds are tax-exempt in India.

    What you can do with your PPF account after it matures

    A Public Provident Fund (PPF) account allows individuals to invest up to Rs 1.5 lakh each year and also provides a tax deduction under Section 80C of the Income Tax Act. An account-holder must deposit a minimum of Rs 500 every financial year to his/her PPF account. The account has a validity of 15 years, also known as its maturity period. Besides the investment into PPF, the maturity amount is tax-free too. The options you have with regards to your PPF account, once it matures- you can withdraw the entire balance and close the account or extend it for five years with or without making further contributions. The extension in blocks of five years can be done indefinitely. Here are these choices in more detail.

    How to deal with your PPF account on maturity

    You can get the maturity proceeds transferred to your savings account by submitting an application to the bank or post office in the prescribed format with details of PPF and savings accounts.

    Rally in debt mutual funds is coming to an end: Steps investors should take to prepare for coming yrs

    With interest rates at their lowest ever, the interest rate downtrend is on its last legs. This means debt mutual funds’ returns are likely to be very different in the coming years. Find out what investors should do in this situation.

    Will tax on PF interest also cover contribution to PPF account?

    On the plain reading of the budget documents, it appears that tax will apply to the interest earned on contributions made to Employees' Provident Fund (EPF), Voluntary Provident Fund (VPF) as well as Public Provident Fund (PPF).

    How should I invest my retirment savings to receive monthly income of Rs 1 lakh?

    Assuming you want to withdraw a fixed amount each month from your post-retirement corpus, a part of it has to be invested in low-risk fixed income instruments like ultra-short duration debt funds to ensure a steady income and capital protection.

    Tax on PF interest will change the way we invest in it: How the Budget hits your PF

    This is not the first time the government has proposed to tax Provident Fund money. A significant number of salaried employees use the Voluntary Provident Fund to invest more than the mandatory 12% of basic pay. The new Wage Code adds another complexity to the issue.

    What financial experts think about RBI’s new window for retail investors to buy-sell govt bonds

    ​​Encashing direct investments in gilts quickly could be more difficult than encashing gilt mutual fund units. Direct investment in Gilts can be considered by someone looking for safety of investment of the highest level and who is willing to remain invested till maturity of the instrument.

    How to reactivate a PPF account

    A Public Provident Fund (PPF) account holder is required to deposit a minimum of Rs 500 every financial year. Failure to deposit this amount leads to account being designated as inactive. Here is how one can reactivate his/her PPF account.

    Should I withdraw money from EPF account to pay off my home loan?

    Before withdrawing money from your Employees' Provident Fund (EPF) account to pay off your home loan, there are certain aspects you need to consider. Some of these include your overall financial position; what percentage of your salary goes as EMI? etc.

    VPF sweetest fixed income investment option despite B sting

    If you want to invest more, the VPF is your best bet. In the 30% tax bracket, it would still give 5.85% returns, which is higher than what other fixed income options offer. This calculation assumes that the EPF rate will remain at 8.5%.

    PPF, NSC and other small savings scheme interest rates kept unchanged by govt

    The finance ministry made this announcement via a circular dated September 30, 2020. As per the circular, the interest rate on small savings schemes for the third quarter of FY 2020-21 shall remain unchanged from those notified for the second quarter of the FY 2020-21.

    MF portfolio doctor: Rana should reduce contribution to PPF, increase equity mutual SIPs

    The Portfolio Doctor assesses the health of the fund portfolio, examines the schemes and their suitability with regard to the goals and, if required, recommends corrective measures.

    Optimise your tax planning: How to best utilise the tax deductions available

    Here is a road map to make sure you are utilising all the tax-saving avenues available to you.

    I want to start investing in a mutual fund SIP of Rs 5,000 for my sons' education. Which scheme should I invest in?

    Use PPF or a corporate bond fund such as HDFC Corporate Bond for about 30% of the allocation to debt. This will ensure that you don’t need to review or maintain your portfolio and get market-linked returns.

    Where should I invest my monthly savings of Rs 80,000?

    Considering a young age and assuming that the risk profile will be aggressive and you can stay invested for at least 7-10 years. You may create a pure equity-oriented portfolio comprising of domestic and US equity mutual funds.

    Tax saving: How section 80C of the Income-tax Act works

    Deduction under section 80C of the Income-tax Act, 1961 can reduce up to Rs 1.5 lakh from the gross total income in a financial year. Here is how this section works and can help you save tax in a financial year.

    Disinvestment, attracting new capital and transparency key highlights of Budget 2021: ETILC Members

    ETILC hosted an exclusive post-budget analysis session with over 50 CEOs involved engaging with senior members from KPMG India.

    Govt relaxes norms for PPF, SSY and RD account holders

    The relaxations with respect to small savings schemes have been extended to July 31, 2020, due to on-going novel coronavirus pandemic situation in the country.

    PPF: 7 things you should know about Public Provident Fund

    A PPF account matures in 15 years. After the account matures, you can either withdraw the entire balance and close the account or extend it for five years with or without making further contributions.

    PPF, NSC and other post office schemes interest rates remain unchanged

    For Q1 of FY 2020-21, the government had slashed rates of small savings schemes by 0.7-1.40%. If the government had cut rates for this quarter as well in the similar fashion, then PPF would have fetched returns below the 7 per cent mark - a 46-year low.

    MF portfolio doctor: Sethi needs to increase mutual fund SIPs to Rs 80,000 to reach money goals

    The mutual fund portfolio doctor assesses the health of the mutual fund portfolio, examines the mutual fund schemes and their suitability with regard to the money goals and, if required, recommends corrective measures.

    How to deal with illiquid assets during a crisis

    Your investments should be flexible enough to allow you to take a break or even discontinue if there is an income shortage, which has happened with many due to the covid crisis. If there is a requirement for funds, it must be possible to easily liquidate investments.

    Union Budget 2021: A guide to saving your taxes

    If you have not opted for the new ‘simplified’ personal income tax regime and your basic salary is over Rs 1 lakh a month, your 80C limit will be used up by provident fund contributions alone. Want to save more? Read to know how.

    How can I invest surplus of Rs 25,000 per month to meet my money goals?

    The investment decision must be re-evaluated based on current investments and liabilities, future plans and financial goals.

    Are direct mutual fund plans better than regular plans?

    You should go for the direct mutual fund plans if you can monitor your investments well or use the service of a fee-based adviser.

    MF portfolio doctor: 5% hike in mutual fund SIPs can help Nanvani meet all money goals

    The mutual fund portfolio doctor assesses the health of the portfolio, examines the schemes and their suitability to the goals and recommends corrective measures. ​​The advice given is based on the performance of the funds, the risk profile and financial goals of the investor.

    Seven money mistakes that can hurt your retirement planning and goals

    There are several excuses for not starting retirement planning timely and “we are eligible for pension” is one of them. Even those who understand the need for retirement planning, tend to out it off with various excuses. Don't jeopardise your old age by these sins.

    No penalty, revival fees for PPF, RD and other small savings schemes

    The decision has been taken by the Ministry of Finance as many investors have not been able to deposit money into their accounts on time due to the nationwide lockdown.

    5 voluntary retirement products that you can consider

    Mutual funds also offer designated pension plans. One can choose to remain invested and receive a periodic payment in the form of dividend or redemption while the rest of the funds continue to remain invested and grow.

    Budget wishlist from insurers: Extra tax rebate and tax-free annuities

    A move in the right direction would be to make annuities tax-free. Doing so would bring about parity between this segment and the NPS, which is allowed a further tax exemption limit of Rs 50,000 over and above the Rs. 1.5 lakh under Section 80C.

    I have no debt in my investment portfolio and want to build a corpus of Rs 10 crore in 10-15 years. How should I plan this?

    Try to top up your equity SIP contributions with lump sum investments during steep market corrections to attain goals with much lesser contributions and shorter investment periods.

    ELSS Vs PPF Vs FD - What works for you?

    ELSS tax saving mutual funds have been getting traction in the past few years as individuals are becoming more aware.

    How much should I invest per month to save Rs 1 crore each for my daughters’ education and my retirement?

    ​​You will still have to accumulate around Rs 57 lakh. Assuming you earn a return of 8% annually pre-tax, you will have to invest Rs 7,200 per month.

    Pros and cons of investing in NPS for retirement saving

    National Pension System is an investment product to save for retirement. However, among millennials, very few like to invest in such a product with a long lock-in period but this pension scheme has everything an investor looks for in a retirement plan.

    Equity valuations are high: 6 things to keep in mind while rebalancing your investment portfolio

    It is a good practice to review and rebalance your portfolio. This year has already provided two event-based rebalancing opportunities. Deciding to review and rebalance is only the first part, the more important part is the implementation. Given below is a guide on how you should go about it.

    PPF scheme 2019: Loan against PPF account at 1% and other changes you need to know

    The government via a notification dated December 12, 2019, has replaced the PPF scheme 1968 with the PPF scheme 2019. Though major features have been kept unchanged, a few small tweaks have been made in the scheme which you should know about.

    PPF to fetch 7.1%, NSC 6.8% as govt slashes small savings schemes interest rates

    Rates of these schemes have been slashed by between 70 bps and 140 bps for the Apr-June quarter.

    My PPF account will mature on March 31. Where can I invest this money for the short term?

    There are few choices such as Post Office Time Deposits or debt mutual funds other than bank FDs. A one-year time deposit at the post office will earn 6.9%, calculated quarterly and paid annually. The minimum lock-in is 6 months.

    How PPF account works

    The Public Provident Fund (PPF) is one of the most popular investment options in India. One of the reasons for this is the tax benefit it offers - it comes under the EEE (exempt-exempt-exempt) tax status. Due to the tax benefits offered, many open PPF accounts with their bank/post office to build a sizeable corpus.

    MF portfolio doctor: Magar should exit underperforming mutual fund schemes to achieve money goals

    Neha Magar is investing for her son’s education and marriage. The portfolio doctor has advised her to dump laggards and switch to winners. Here is what you can learn from her portfolio check-up.

    Post office schemes’ interest rates higher than bank FDs but look at these options too

    Investors can consider options other than bank FDs as these are currently offering low rates of interest. However, keep in mind that bank FDs offer good liquidity (although often with a penalty). A similar level of liquidity is offered by very few other options (offering comparable safety).

    5 questions to ask while writing your will

    Writing your will is an important part of financial life. It’s better to be prepared because with Covid you may not get time. Here are 5 questions you must ask while writing it.

    Should I continue with my PPF investment or invest maturity amount in mutual funds?

    Whether you should continue with your PPF investment post maturity or invest the maturity proceeds in mutual funds depends on whether you need that money or not.

    Personal finance basics: 5 things to know about PPF account

    A public provident fund (PPF) account is an investment option that provides income tax deduction u/s 80C for the amount invested (subject to a limit of Rs 1.5 lakh a year). Due to the tax benefits offered, many assessees open PPF accounts.

    Small savings schemes' interest rates slashed. Should you continue with your investments?

    Investors in PPF and Sukanya Samriddhi Yojana will see the impact immediately as lower rates will be applicable on accumulated balance. However, investments made in NSC, SCSS and others prior to the announcement would be shielded from the cut.

    The real task of investing is quite boring and simple; here's how to get over investing inertia

    The real task of investing is quite boring and simple. You want to create three buckets to put money into and draw as needed—liquidity, income and growth. Make the macro level decision of how much of your monthly savings will go into the three buckets.

    My PPF account will mature soon. Can I keep it active without making fresh contributions?

    If you choose to contribute for another 5 years, then you can still withdraw once every financial year but the sum of all withdrawals during the 5-year extension cannot exceed 60% of the balance at the start of the extension.

    What is the maximum age limit to open a PPF account?

    The lock-in period for PPF account holder remains at 15 years irrespective of the age at which you open the account. On maturity, the account can be extended by blocks of 5 years any number of times. Banks cannot deny the extension based on your age.

    Why debt mutual funds don't earn fixed, pre-determined returns

    Debt funds invest in fixed income securities such as bonds and deposits issued by the government, companies and institutions which typically pay a fixed amount of interest at a prespecified rate and frequency.

    Can a senior citizen invest in PPF?

    The only restriction is that an individual is permitted to open and operate only one PPF account at a time.

    Small savings scheme, PPF rates remain unchanged

    ​During the start of the first quarter of FY21, the government had lowered the rates on various schemes by as much as 1.4 percentage points. Interest rates on small savings schemes are reviewed and applied on a quarterly basis. At the end of the March, the government reduced the rates on time deposits from 6.9% in the last quarter of FY20 to 5.5% in Q1 of this fiscal.

    PPF, NSC and other small savings schemes interest rates kept unchanged for March quarter

    For the quarter ending March 2020, small savings schemes such as the Public Provident Fund (PPF), National Savings Certificate (NSC) will continue to fetch same interest rate. PPF will continue to earn 7.9 per cent during the quarter January to March 2020.

    Planning on ditching your mutual funds for stocks? Don't make these mistakes

    Comparing any type of mutual fund with direct stocks is not the right comparison. Besides, mutual funds returns are a derivative of how the broader market performs. It is unfair to blame mutual funds if the market itself has exhibited weakness.

    How a Public Provident Fund (PPF) account works

    PPF accounts have a lock-in of 15 years. On maturity, the investor has the option of taking any one of the following steps- either withdraw the proceeds and close the account or continue the account for a block of five years.

    Is it the right time to invest in ELSS funds? Will market go higher?

    If you have any mutual fund queries, message on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.

    How should a 34-year-old govt employee invest Rs 20,000 a month for next 10 years?

    Catering to a variety of needs such as kid’s education, asset building, wealth creation and retirement planning, start SIPs in mutual fund schemes. Also, buy a term plan of Rs 1 crore with an add-on rider of critical illness and accident disability.

    Why tax planning should not be the key driver of investment decisions

    Personal financial situations are different at different stages of life. Hence, by locking your money in tax-saving products, which are typically long-term products, you might be making a mistake.

    I want to invest for a year, should I opt for a short-term debt mutual fund?

    Given your short horizon, go for only liquid funds and ultra-short/floating rate funds. If you are keen on tax efficiency then some amount can be parked in arbitrage funds (not more than 15-20%).

    What kind of mutual fund investments should I make to accumulate a comfortable retirement corpus?

    Assuming a monthly income of Rs 1 lakh and inflation at 3% per annum thereafter, you may need a corpus of around Rs 3 crore.

    Too many mutual funds in your portfolio may harm rather than help: Here's why

    With an over-diversified portfolio, you are not giving enough heft to any fund to meaningfully add value. A modest outlay will prevent even the best performers from moving the value needle much.

    I am moving to France for my new job. Can I keep my PF account active?

    If the contributions are not made to the PF account, then the account becomes inoperative. However, the account will continue to earn interest.

    How nominees can claim money from small savings schemes like PPF, NSC

    The government via circular dated August 28, 2020, has streamlined the process of claiming money from small savings schemes like PPF, NSC etc for the nominee or legal heirs. Here is a look at the process of claiming money.

    Tax implications of NRI transferring money to wife's bank account in India

    As per current income tax laws, an NRI is required to file an income tax return in India if his gross total income exceeds Rs 2.5 lakh in a financial year.

    How much should I invest for next 25 years to create a retirement corpus of Rs 2 crore?

    Do not set a target without assessing what your cost of living will be. You may need a higher corpus based on your living expenses later. Invest in EPF/PPF/NPS to the extent allowed for a tax deduction.

    Tracking your investments is important to avoid over-diversification

    No additional diversification is provided by investing in more funds beyond a point. Tracking is important.

    PPF rate may fall below 7% to a 46-year low

    Short-term deposit rates are now very close to or even less than what savings bank accounts offer.

    PPF rate may fall below 7% to a 46-year low

    Since 1 April, the 10-year bond yield has till now averaged 6.07% and currently stands at 5.85%, which clearly means a rate cut is in the offing for small savings schemes.

    PPF, NSC, SSY and other small savings schemes' interest rates remain unchanged

    All small savings schemes including PPF, NSC, SSY and others will continue to fetch the same interest rate between October and December quarter of FY 2019-20.

    I want to build corpus of Rs 2 crore by 2035. How can I do that via mutual funds?

    To generate a corpus of Rs 2 crore by 2035, your monthly investment of Rs 40,000 would need to register an annualised return of 12 per cent.

    PPF, SCSS, post office savings schemes: Rules for death claims relaxed

    The Department of Post has, via an order dated, May 20, 2019, amended the powers of various authorities to sanction claims of heirs of deceased people.

    Long-term investment options for a working woman

    If you have any mutual fund queries, message on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.

    Should I extend my PPF account post maturity or shift to debt mutual funds?

    "Whether to extend or redeem your PPF account will be best answered by your financial adviser who is familiar with your financial situation."

    How to open a PPF account for your minor child

    An individual with a PPF account of his own and as a guardian of his child can avail a maximum deduction of Rs 1.5 lakh taking both the accounts together.

    How to invest Rs 2 crore to earn monthly income of Rs 2 lakh

    To earn an income of Rs 2 lakh per month or Rs 24 lakh per annum from the corpus of Rs 2 crore, you must return of 12 per cent. However, there is no fixed income instrument that can currently offer you such rate of return.

    Should I redeem investments from underperforming mutual fund schemes once the market recovers?

    Funds with value strategy have seen prolonged underperformance. Since you have a couple of them, these are likely pulling down your returns. Hold and stop fresh SIPs in them. Wait for a turnaround in this strategy and then reduce exposure.

    Equities offer the best growth over the long term: Prateek Mehta, Scripbox

    "In the long-term which is 7-10 years, investors can expect 10-12% annualised growth on equity mutual funds. Market dips are a part of long-term investments," says Prateek Mehta, co-founder and Chief Business Officer, Scripbox.

    I am 25 and earn Rs 4.8 lakh per annum. Where should I invest Rs 10,000 for the next seven years?

    You should consider the risks and only if you are comfortable, you can invest in large-cap funds like the Axis Blue Chip Fund and in low-cost index funds like HDFC Index Fund - Sensex Plan or Motilal Oswal Nifty 500 Fund.

    My grandfather left me Rs 1 lakh in his will. How should I invest this amount for 5 years?

    For a 5-year window, you can opt for schemes such as the NSC, Post Office Time Deposit or Post Office Monthly Income Scheme (POMIS). The NSC offers you 6.8% interest, while POTD and POMIS offer 6.7% and 6.6% returns respectively.

    How to open PPF account online in SBI, PNB, ICICI Bank, or HDFC Bank

    To open a PPF account online in one of these Banks, you need to have access to the bank's Net banking portal.

    FDs, PPF gave higher returns than SIPs in equity MFs over five years

    Gross inflows into MF schemes via SIPs in June fell to Rs 7,927 crore from Rs 8,123 crore in May.

    By investing Rs 3,000 a month can these mutual funds help me create Rs 1-2 crore in 19 years?

    If you are open to looking at other products, allocate the amount needed for tax saving to the PPF and keep your mutual fund portfolio in open-ended schemes

    Common application form issued for PPF, NSC and other small savings schemes

    It must be recalled that the finance ministry had revised rules and introduced separate forms for each small savings scheme via a notification in December 2019.

    Will I be able to build a corpus of Rs 20 lakh for my daughter’s wedding?

    If you have any mutual fund queries, message ET Mutual Funds on Facebook. We will get it answered by our panel of experts.

    How to partially withdraw from your PPF

    One is allowed to withdraw up to 50% of the PPF account balance after completion of five years from the end of the subscription year. Withdrawals are tax-free.

    Should I include PPF in my portfolio?

    If you have any mutual fund queries, message on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.

    Do you need professional help in filing ITR? Here's how much it will cost you

    Most taxpayers are not aware of the finer points of taxation. A professional can ensure you file an error-free return. Here are things to consider if you are planning on taking professional help to file your ITR and the likely costs of the same.

    1 2 3 4 5 6 7 8 9 10
    The Economic Times