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How to Save Money in PPF Account

September 8, 2015 by sunithbabu 33 Comments

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.

How to Save in 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 savings for PPF Account

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

Fixed Deposit Savings for PPF Account



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

NSC Investment into PPF Account

 

 

 

Comments

  1. Amar Jit Bajaj says

    October 5, 2014 at 7:52 pm

    Good article.I would however mention that interest on fds even when less than Rs.10000 in a financial year is taxable though no tads is deducted by the bank.

    Reply
    • sunithbabu says

      October 6, 2014 at 4:09 pm

      Please note – If the interest amount exceeds 10,000 INR then bank automatically deducts and gives the amount

      Reply
  2. Amar Jit Bajaj says

    October 5, 2014 at 7:56 pm

    Good article.I may however add that interest income on fds even below Rs.10000 a year is taxable though no tads is deducted on it.

    Reply
    • sunithbabu says

      October 6, 2014 at 4:33 pm

      Please note – If the interest amount exceeds 10,000 INR then bank automatically deducts and gives the amount

      Reply
  3. Dilip Govind says

    November 18, 2014 at 9:56 am

    Dear sir myself Dilip Govind.
    My wife is a home maker I want to open a PPF account in her name.If I open it tomorrow when will be the maturity year.
    and v both have a account in canara bank.can the account be opened there.

    Reply
    • sunithbabu says

      December 20, 2014 at 4:40 pm

      Yes, you can open

      Reply
  4. Sagar Mahajan says

    January 7, 2015 at 7:38 pm

    I had made a PPF account in SBI Bank on 05-04-2014 with initial deposit of 10400/-. So what would be the interest gained and when will be the maturity date? Help me as i am new to PPF.

    Reply
    • sunithbabu says

      February 1, 2015 at 7:44 am

      2014 opened so maturity will be 2030

      Reply
  5. Avijit says

    January 12, 2015 at 12:33 am

    Nice article.
    Is it good to open a ppf ac by January/feb 2015,or shall I open it during april 2015?

    Reply
    • sunithbabu says

      January 15, 2015 at 8:40 pm

      See, Opening now Jan / Feb makes it clear that you will lose 1 year from the 15 year benefit and tax structure. If you are okay with that, you can open immediately

      Reply
  6. Ankit says

    January 21, 2015 at 12:12 am

    Sir, I have a doubt. If I open e flexible RDs ( in ICICI Bank ) or RDs each of Rs.100000, then will the cumulative interest amount be taxable or not because it’s exceeding Rs.10000? Also, please suggest me about opening the multiple RDs of amount 100000 Rs or less in same bank is allowed?

    Reply
    • sunithbabu says

      February 1, 2015 at 6:37 am

      Opening FD in same bank is allowed, so is the case RD’s. Tax will come as its more than 1 Lakh, since interest more than 10,000 from FD is taxable, so opening RD’s is a good advise.

      Reply
  7. TANMOY DEY MALLICK says

    February 7, 2015 at 5:14 pm

    I HAD OPENED AN PPF ACCOUNT IN 23/03/2006 IN SBI WITH RS. 10000. BUT AFTER THAT I HAVE NEVER MADE A TRANSACTION. IS MY ACCOUNT STILL VALID? AND SECONDLY CAN ICONTINUE NOW?

    Reply
    • sunithbabu says

      February 15, 2015 at 9:38 am

      Make sure, you pay the fine for the dormant years and start making the investment

      Reply
  8. Sanjeev rana says

    February 26, 2015 at 9:30 am

    Thank you sir
    Your article is too good. It helps me a lot thank you again

    Reply
  9. anil says

    March 2, 2015 at 1:43 pm

    Namaskar,
    I want to open iwish RD a/c with icici for PPF purpose. What is the best time this year to do so?

    Reply
    • sunithbabu says

      March 3, 2015 at 6:37 am

      Open a RD account (Not more than 12,500) = 12,500* 12 = 1,50,000 During the Month of March every year so that you can complete the account in RD by Feb the next year and in turn deposit in PPF Account during April 1st – 5th of that year.

      Reply
  10. Pradhan says

    April 2, 2015 at 2:43 pm

    Instead of putting 12,500 per month in an RD & then transferring 1.5 lakh lumpsum, isnt there a benefit of directly putting 12,500 into PPF account monthly?

    Reply
    • sunithbabu says

      April 3, 2015 at 7:32 am

      If you have already deposited 1,50,000 INR in the ppf account, you can start saving further by investing 12,500 in RD account for the next year deposit. That way you would not be burdened for the second year.

      Reply
  11. vikram says

    April 6, 2015 at 5:24 pm

    I had deposit 1 lakh in pnb in mar 2015 now at what time I have to deposited for the nxt year

    Reply
    • sunithbabu says

      April 8, 2015 at 7:10 am

      April 1st – march 31st

      Reply
  12. mayank Bhatnagar says

    May 10, 2015 at 3:42 pm

    I already have one PPF account in my name. Can I open another PPF account in my wife’s name and payment will be deposited by me? How much payment can I deposit in my wife’s account in a year?

    Reply
    • sunithbabu says

      May 24, 2015 at 5:01 pm

      Max 1,50,000 INR possible. Yes you can open in your wife name

      Reply
  13. Ravi Shankar R says

    July 1, 2015 at 5:11 pm

    Hi, very nice article.

    I have a query, I have opened PPF and maitaining the account from 3 years. However, I am not depositing constant amount. I deposit any amount from 10k to 20 k in the year and also in any month. Is this fine?

    Reply
    • sunithbabu says

      September 21, 2015 at 11:24 am

      You may not be able to yield better returns on the account. make sure you invest for your retirement

      Reply
  14. Assad Asif says

    October 19, 2015 at 12:22 am

    Hi, If I start a new ppf account in 2015 n invest 1 lakh annually, then at the end of 15 yr since starting date will i be eligible to withdraw entire investment (15 lakh plus interest) or only the first investment which has completed 15 yr term (1 lakh plus interest on that every year for next 15 yrs)

    Reply
    • sunithbabu says

      November 1, 2015 at 10:47 pm

      No one time withdrawal is possible after 15 years.

      Reply
  15. Sridhar says

    March 15, 2016 at 2:00 pm

    Ppf is good investment or not tell me how to save tell me

    Reply
  16. Rexon says

    May 21, 2016 at 2:09 pm

    I had opened ppf account 4 yrs back with jst 500rs nd fogot abt it nor I wnt to lokk back at it..now I wnt 2 make fresh investment in ppf account in new bank can I do it..wil my old ppf account will clash if I have to make new ppf account.
    And one more thing is can I make transfer even from abroad to my new ppf account through internet banking if so wil it have any charges.

    Reply
    • sunithbabu says

      June 13, 2016 at 2:50 pm

      Not possible, you cannot open two accounts

      Reply
  17. Nitin says

    July 7, 2016 at 5:32 am

    Hi Sir,

    I have PPF account in SBI bank with linked to my saving account ( I am using net banking) now i want to open PPF account for my daughter my question is can I open PPF account for my daughter online using my net banking Id and linked to my saving account or I have to open separate account for my daughter? What is best bank to open new PPF account ?

    Reply

Trackbacks

  1. CAN I Continue PPF After 15 Years - PPF Account says:
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  2. PPF Investment Period says:
    January 19, 2016 at 11:34 am

    […] is something we need to master so that we can make the best utilization of our money. >>> PPF Investment Strategy  <<< has three best ways which every user needs to follow so that best benefits can be […]

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