In this post we will learn more on How to Save Money in PPF Account, for better returns and reduce burden on investing such a huge money in PPF Account during 1st – 5th April of every year. In the previous post we did learn about Can I Extend my PPF Account Beyond 15 Years and the response from users were overwhelming as few of them did not know that they get better benefits by extending their PPF Account.
Well, now to the Hot Topic – How to Save Money in PPF Account.
PPF Investment happens to be best savings scheme by Govt of India and better safe and guaranteed returns. Many people have asked me when to deposit in PPF Account and I have written an article on Best Time to Invest in PPF Account and by far is the best time to invest in ppf. With this starts another problem, how to invest such a huge money in PPF Account b/w 1st April – 5th April of every year and now with PPF enhanced limit of 1.5 Lakh how to save that much money and invest one time. People have infact complained how to save so much and invest in lumpsum. Well, there different class of people who can invest monthly in PPF while some one time, but either way, Money Saved is Money Doubled. Now we need to see how we can triple the money with some simple techniques.
How to Save in PPF Account
Well there are different methods to save in PPF Account few are listed below
Few Methods are listed below
Open Recurring Deposit Account : One of the simplest method to save lumpsum in your ppf account during 1st April – 5th April every year is to open a Recurring Deposit Account during March 1st week of every year and later after maturity for 1 year save that money in PPF Account. Here is the math
A user opens a Recurring Deposit Account during April 1st 2015 and invests for the next 1 year and the maturity amount will reach your pocket during March 1st 2016. Take the matured amount and invest in PPF Account during April 1st 2016. Make sure how much you want to invest in RD account and do the same for the next 15 years. This way you get double returns on the same money.
RD Account to PPF Account
Open a Fixed Deposit : You can open a Fixed Deposit account for 1 year and later take the interest earned from the FD with the actual amount and invest in PPF Account. Again caution to be taken is don’t deposit more than a 1,00,000 INR as the returns will be taxable for interest beyond 10,000 INR. So a better way to invest is deposit max 1,00,000 INR and you might get interest amount ranging from 8,500 INR – 9,250 INR so you have saved that money from your pocket. Now add the remaining money for PPF if you wish so. Do this every year and your burden on investing in PPF Account will be well balanced
FD Account to PPF Account
Purchase NSC Bond : This is another way to save money for long term PPF Account. Those who want to save money for their ppf account deposit at the end of 5th year or during their extension period. Imagine, a user wants to invest further after the ppf account matures, but let’s assume he’s retired from job and has sufficient savings for his monthly expenses. But cannot make further contributions to PPF Account. Then this technique works out. When your PPF Account is 1/2 way completed, its time to purchase a NSC Bond as the maturity period is 6 years. So ideally when the PPF Account at the 10 year, a user can purchase NSC Bonds from the 10th year to 15th year and reinvest the money gained every month into PPF Account from 16th year to 20th year. This way he does not make any new investments but reinvest the money into PPF for a better and higher returns. Also, a user can start depositing monthly into PPF Account based on monthly investment into NSC Bonds.
NSC Investment into PPF Account