If you are planning to invest in PPF, then you must know about some things related to it, which people often do not pay attention to.
Public Provident Fund (PPF) is considered a better investment scheme for those people who want to invest for a long time and are not ready to take any kind of risk in terms of returns. PPF is a scheme in which guaranteed returns are available. This scheme is for 15 years. At present, interest on this scheme is 7.1 percent. If you also want to invest in this scheme, then you must know about some things which people often do not pay attention to.
Fear of interest rate change
The interest paid on PPF is decided by the Finance Ministry. It is reviewed every quarter. In such a situation, there is a possibility of interest rate change. If we look at the previous interest rates, in the year 2013, interest on PPF was available at the rate of 8.8 percent. Later in 2014 it decreased to 8.7 percent. After this, a major change took place in the year 2016 and the interest rate of PPF came down to 8.1 percent. After this, another cut was made in 2016 itself and on October 1, 2016, the interest rate of PPF came down to 8 percent.
After this, the next change happened in the year 2017 when on April 1, the government reduced the interest rate of PPF to 7.9 percent. Just three months later, in July 2017, the interest on PPF was reduced to 7.8 percent. On January 1, 2018, the interest rate of PPF was reduced to 7.6 percent. However, on October 1, 2018, it was again increased to 8 percent. On July 1, 2020, this interest rate was reduced again and it was reduced to 7.9 percent. After this, the government cut it on April 1, 2020 and the PPF interest rate was reduced to 7.1 percent. Since then till now this interest rate has remained at 7.1 percent.
No more than one account
Just like you can get multiple FDs, open more than one RD account, you do not get such facility in PPF. You can operate only one account in PPF. However, you can definitely participate as a guardian while opening a PPF account in the name of your minor child, but in that also only one of the parents can become the guardian.
No joint account option
Just as you get the option of joint account in savings account, RD or any other scheme, this is not the case in PPF. Only one person can open it in his name. But you can definitely make a nominee in this and also decide everyone’s share on the deposit.
Many schemes are giving better interest
Today, you are getting interest at the rate of 7.1 percent on PPF, but at present there are many such schemes which are giving better interest than PPF. In such a situation, if we talk about SIP, the average return is up to 12 percent. By investing for a long time, a good amount of money can be added. Apart from this, 8 percent interest is being given on Government’s Sukanya Samriddhi and 8.2 percent interest on Senior Citizen Saving Scheme. Apart from this, the new scheme ‘Mahila Samman Bachat Patra’ announced for women in the budget of 2023 is also getting interest at the rate of 7.5 percent.
NRIs cannot invest
If you fall in the category of NRI then you cannot invest in PPF account. However, if your PPF account is already open and you get NRI status in between, then you can continue your account, but after maturity you will not get the option of account extension.
