A lot many of us have parked our hard-money into PPF account owing to a number of benefits it offers. And now as the new financial year begins, there also arises a need that you assess your invested money and when it comes to public provident fund account, April is a crucial month.
And herein we discuss why this month is so very important for PPF investors:
Know your interest earnings on PPF investment in the previous fiscal year:
Though interest is earned on a quarterly basis and the government revises interest rates on small savings schemes such as PPF etc based on the yield on government securities. But for a PPF account holder, the interest is credited only once i.e. on March 31st every year.
And so in April, you can note the interest earned in the previous financial year and from that, you can arrive at the probable maturity amount from the investment based on the PPF calculator.
Deposit In PPF A/c By 5th Of April To Get Full-Year Returns:
The interest rate on PPF is calculated on the minimum balance on the account of an individual between 5th to the last day of each month. Hence, if you plan to make any large deposits, then remember to do it before 5th so that you can get higher returns. And so in a case when payment towards the account has been made on May 6, you will be entitled to returns only for 10 months i.e. from June to March.
PPF account matures in April:
PPF account is a long term investment with maturity after the end of 15 years from the account opening date. So, irrespective of the time when the account was opened, the account matures in April.
Defaults need to be paid for in April or afterwards:
In case you acknowledge that in the previous year, you have missed on even the minimum amount that needs to be paid to keep the account running, you can make the payment in April or afterwards. It is to be noted that for each year of default, Rs. 50 is charged as a penalty if an investor does not park even the minimum amount of Rs. 500 on the completion of the financial year.
Option to extend PPF for another block of 5 years:
As the maturity for a PPF account falls in the month of April, the investor can place the application for the extension of the account for a block of 5 years with fresh contributions till April only.