Latest news with #PublicProvidentFund
The Hindu
7 hours ago
- Business
- The Hindu
Ask Us: On investments
Q I am a retiree and started a Post Office PPF account in November 2020. I have ₹3 lakh in the account and am badly in need of money for medical emergency. Can I close my account and get back the money now? Raja Thilagar A We are sorry to hear about your situation. Public Provident Fund (PPF) account comes with a lock-in period of 15 years, i.e. account can be closed only after the completion of 15 years under normal circumstances. It's not advisable to open a PPF account at the fag end of your career. In the Post Office PPF account, a subscriber can withdraw only after the completion of five financial years excluding the account opening. In your case, you have opened in November 2020 (FY20-21), withdrawal can be made only during FY2026-27, i.e. after completion of March 31, 2026. Further, only 50% of the balance credit at the end of the fourth preceding year could be withdrawn. Premature closure is allowed only after the completion of the fifth calendar year from the end of the year in which the account was opened. The closure is subject to conditions such as life-threatening disease of account holder, spouse or dependent children; higher education of account holder or dependent children. It is also allowed when there is a change in the resident status of an account holder (i.e., he/she became NRI). However, 1% interest shall be deducted for the same. Though you have a medical emergency, it is likely impossible to close your PPF account prematurely or withdraw your corpus. However, a post office official said, 'If you have valid medical certificates and that the medical condition (of self or any of the family member) is life-threatening, you can place a request to the Divisional Head of your branch through your branch head and try explaining your crisis. However, it's not a guarantee that your account could be closed prematurely.' Q I passed out from college recently and am working in a Central government PSU. My father is into a small business and I have no liabilities. How should I start investing for long-term? Also advise me on health insurance for my family. Ansh Gupta A You are considerably young and have enough time for growth prospects, be it in direct equity investing or through mutual funds. First, you can start investing in mutual funds (MFs). Choose any Index fund (passive) that tracks Nifty 50 or Sensex 30, which are comparatively (not completely) safer. However, choose only direct schemes but not regular schemes that are offered by distributors or brokers. When compared with regular schemes, the expense ratio for direct schemes is lower. Either you can start a Systematic Investment Plan (SIP) or you can invest in a lumpsum plan. SIP is a monthly commitment whereas a lumpsum is a one-time investment plan. You can start investing a minimum of ₹500 per month (some MF schemes offer lower amount plans also) in any passive fund or as a one-time lumpsum, if you get any incentive or bonus. Since you have no liability, you can start a SIP of ₹6,000 per month. Keep track of the performance of SIP investment for two to three years. Once you have understood how market movements impact your mutual fund performance, you can consider investing in other active mutual funds and also start investing in equity markets, that is stocks. For a decent health insurance coverage for you and your family, take a family floater policy with a sum insured (SI) of up to ₹10 lakh at an affordable premium. Important criteria to consider in the policy are list of network hospitals for cashless treatment, higher claim settlement ratio of insurance companies, cap on room rents, sub-limits on treatments, waiting periods for pre-existing diseases, pre- and post-hospitalisation coverage period, no-claim bonus benefits, inclusion of annual health check-up facility, co-payment clauses, coverage for daycare procedures and life-long renewability. (The writer is an NISM & CRISIL-certified wealth manager)
India Gazette
3 days ago
- Business
- India Gazette
Central Govt NPS retirees to get additional benefits under Unified Pension Scheme
ANI 30 May 2025, 18:51 GMT+10 New Delhi [India], May 30 (ANI): The Ministry of Finance, on Friday, announced that subscribers under the National Pension Scheme (NPS) who have retired on or before March 31, 2025, with a minimum of 10 years of qualifying service, or their legally wedded spouse, shall be eligible to claim additional benefits under the Unified Pension Scheme (UPS).These UPS benefits will be provided in addition to the NPS benefits already claimed by the retirees who retired before 31st March 2025, under the NPS, are either eligible for a one-time payment equal to one-tenth of their last Basic Pay + DA for every completed 6 months of service or a monthly top-up if their NPS pension is less than the UPS amount plus Dearness Relief. Additionally, arrears with simple interest as per the applicable Public Provident Fund (PPF) to the ministry, subscribers and their spouses can claim these benefits through the physical mode, which involves visiting their respective Drawing and Disbursing Officer (DDO) and submitting the relevant form. Online mode which include visiting the website to fill out the online form, can also be used to claim these befits. The last date to claim these UPS benefits is June 30, 2025, the statement by Finance ministry Delhi Government is planning to increase the monthly pension for senior citizens and persons with disabilities by Rs 500 to provide additional financial support to these this year, the NSO said that over 6.4 crore new subscribers joined EPF and ESI schemes between September 2017 and November 2019 and over 16 lakh new subscribers joined the National Pension Scheme during the period. (ANI)
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Business Standard
3 days ago
- Business
- Business Standard
Centre announces unified pension scheme for retired NPS subscribers
The Union government has rolled out the Unified Pension Scheme (UPS), offering enhanced pension benefits to retired subscribers of the National Pension System (NPS). The scheme applies to those who retired on or before 31 March 2025, with at least 10 years of qualifying service. If the subscriber is deceased, their legally wedded spouse is also eligible to receive these benefits. The UPS provides supplementary benefits in addition to the existing NPS entitlements. These include a one-time lump sum payment, a monthly top-up pension, and interest on any arrears. Under the scheme, eligible retirees will receive a lump sum amount calculated as one-tenth of their last drawn basic pay plus dearness allowance for every completed six-month period of qualifying service. The scheme covers various forms of retirement, including superannuation, voluntary retirement, and retirement under Fundamental Rule (FR) 56(j). If the annuity received under the NPS is lower than the guaranteed pension promised by UPS, the government will pay a monthly top-up to cover the shortfall. Furthermore, beneficiaries can claim arrears along with simple interest, calculated at the prevailing Public Provident Fund (PPF) interest rate. UPS came into effect on 1 April 2025, aiming to bring greater certainty to pension payouts by guaranteeing a fixed monthly pension — thus addressing the inherent variability of NPS returns. For retirees with 25 years or more of qualifying service, the scheme ensures a pension equal to 50 per cent of the average basic pay drawn during the last 12 months of service. The Pension Fund Regulatory and Development Authority (PFRDA) issued the UPS Regulations, 2025, on 19 March, outlining eligibility criteria and the process for claiming benefits. To assist retirees and stakeholders, PFRDA is also conducting webinars and informational sessions on the new scheme.
Indian Express
23-05-2025
- Business
- Indian Express
Slow and Steady: How Much of Your Money Belongs in PPF?
For investors seeking a long-term, low-risk investment that offers tax efficiency, the Public Provident Fund (PPF) is an ideal option. Popular for decades, PPF offers stable, tax-free returns, making it a good fit for a conservative portfolio, or even balancing your portfolio's risk. But, how much should you allocate to PPF? The answer to that demands a fair understanding of how the scheme is structured, its benefits, and its limitations. So, let's find out. The Public Provident Fund (PPF) scheme allows tax deductions of up to ₹1.5 lakh annually under Section 80C of the Income-tax Act. The returns earned on the investment are completely tax-free. However, it comes with a lock-in period of 15 years, during which full withdrawals are not permitted. Partial withdrawals are allowed under specific conditions, such as a medical emergency. The scheme is exclusively available only to Indian citizens and an eligible individual can open only one PPF account. With PPF, your principal, interest earned, and maturity proceeds are all exempt from tax. The minimum annual contribution required is ₹500, while the maximum is capped at ₹1.5 lakh. If you skip the minimum deposit in any year, the account becomes inactive and needs to be reactivated. The interest rate on PPF is reviewed quarterly and may change from time to time. At present, it offers an annual interest rate of 7.1%, compounded once a year. In terms of actual returns, the comparison between a PPF and a fixed deposit becomes quite stark. For instance, if a bank FD offers 7% interest, post-tax, your actual return is likely to be closer to 4.9%. In contrast, PPF offers 7.1% tax-free. That difference may look small, but it compounds significantly over time. So, if you are choosing purely based on post-tax returns, PPF wins in most scenarios, especially if you fall into a higher tax slab. But remember, PPF does have an annual investment cap of Rs.1.5 lakh. The real question is not whether to invest in PPF, but how much. If you are seeking tax-saving benefits under Sec 80C, analyse the investments or expenses you have already availed of under Sec 80C, and invest the remainder in PPF. For instance, you have already availed of Rs.1 lakh deduction out of the maximum Rs.1.5 lakh under Sec 80C with life insurance premiums, children's tuition fees, and principal repayments on home loans. Invest the remaining Rs.50,000 in PPF to ensure you have used up the maximum tax benefit Sec 80C has to offer. The strategy, essentially, is to avoid duplication. While PPF is a useful tax-saving tool, it isn't the only one. Utilise it to complement your broader financial strategy. As your responsibilities grow and risk tolerance reduces, your investment strategy should also shift towards safer options, without focusing on only one investment like PPF. Instead, treat it as a diversifying element in your portfolio to balance riskier assets like equity mutual funds. You can also pair it with other low-risk instruments offering better liquidity or shorter tenures. Most importantly, invest in a consistent and disciplined manner instead of leaning heavily on one instrument. PPF isn't just a tax saver, but also a steady wealth builder. With clear goals and patience, it quietly works in the background to support your long-term financial plan, without demanding much or adding weight to your financial plan. It is most effective when used as part of a broader financial strategy. Adhil Shetty is the CEO of
India Today
15-05-2025
- Business
- India Today
FDs vs PPF: Which investment option should you choose and why?
If you're someone who prefers safe and steady returns on your money, you've likely considered Fixed Deposits (FDs) and Public Provident Fund (PPF). Both are popular choices among conservative investors who don't want to take much risk with their say you have a total investment portfolio of Rs 2 crore. You might want to keep at least 40%, which is around Rs 80 lakh, in low-risk options like PPF, FDs, bonds, or debt mutual funds. These help your money grow slowly but steadily, even when the market isn't doing let's compare FDs and PPF based on key factors:INTEREST RATES Most banks currently offer interest on FDs ranging from 6.7% to 7.1% per year. PPF, on the other hand, currently offers a fixed interest of 7.1%.So, in terms of returns, PPF is either at par or slightly better than FDs. However, FD rates can vary depending on how long you keep your money MUCH CAN YOU INVEST?In a PPF account, you can invest a minimum of Rs 500 and up to Rs 1.5 lakh in a financial year. That's the have no upper limit. Whether you want to invest Rs 50,000 or Rs 5 crore, FDs can handle it. This makes FDs more suitable if you're dealing with a large amount of BENEFITSPPF has an edge when it comes to tax savings. By investing in PPF, you can claim a tax exemption of up to Rs 1.5 lakh under Section 80C in a financial year, under the old tax regime. Moreover, the interest you earn from a PPF account is also however, do not offer any tax deduction unless it's a 5-year tax-saving FD, and even then, the interest you earn is PERIODThis is where FD wins. PPF has a lock-in of 15 years. You can't fully withdraw your money before that, although partial withdrawals and loans are allowed after a few are far more flexible. You can choose the tenure, ranging from a few days to several years, and withdraw whenever you want (though early withdrawal may attract a small penalty).WHAT TO PICK?If you want tax-free returns and can lock your money away for the long term, PPF is a great choice. If flexibility and large investments matter more, FDs are combining PPF and FDs wisely offers both stability and growth. Use PPF for long-term, tax-free savings, and FDs for emergencies or short-term plans, thereby making your overall investment safer and more efficient.
