The Public Provident Fund (PPF) is one the best savings and retirement-oriented tools that provides the general public with a huge nest egg upon maturity. In effect, PPF is a voluntary savings tools that, over the years, can provide a big sum of money, ensuring that the subscribers get a lumpsum amount they can use for various purposes, from investing further to perhaps, buying a house, or any other personal need that requires a huge payout. Notably, PPF interest rate today is as high as 7.1%. However, there are many PPF account holders who are making big mistakes that cause a tremendous loss of money. This must be avoided at all times.
Here we list 3 PPF mistakes to avoid at all cost:
Don’t make partial contribution
1. The first PPF mistake to avoid is to not contribute the maximum limit of Rs 150,000 at one go. In fact, you must contribute in the first week of April. It should be done as soon as April 1 has passed, and at the most make sure it is done before April 5. You will get the highest return possible from your PPF this way.
Do not miss payments ever
2. In case you cannot make the Rs 1.5 lakh contribution at one go, try to do so as monthly payments every month. Remember, do not ever miss any payment as this will again cause you to lose huge sums of money. Again, each, month, make the contribution as close to the beginning of the month as possible. You do not want to lose out on interest at all. Even a small sum saved this way will add up to a big sum after years of investing due to compounding of interest.
Never withdraw funds prematurely
3. And this is something that a PPF account holder must absolutely never do. Do not withdraw funds prematurely. You will lose a massive amount of money that will completely wreck your retirement planning or dreams of owning an asset of high value later in life. Not just that, premature PPF withdrawal can lead to slapping of penalties as there is a lock-in period of 15 years.
PPF points to remember
1. From 01.01.2024, interest rates are as follows:- 7.1 % per annum (compounded yearly).
2. Minimum PPF contribution is INR. 500
3. Maximum PPF contribution is INR. 1,50,000 (in a financial year).
* Deposits can be made in lump-sum or in installments.
Have PPF account? Stop losing money, here are 3 mistakes you must never make. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
