Public Provident Fund (PPF) is certainly one of the nice and safest investment options that allow you to gather a massive corpus over a duration of years and additionally save earnings tax. Currently, the PPF account interest rate is eight% and there is a lock-in period of 15 years. Often salaried employees in the excessive tax bracket deal with PPF account as an option wherein they can deposit some money as a final lodge to keep taxes closer to the end of the economic 12 months and before filing the yearly profits tax go back. However, you may be amazed to know that such an exercise can put off your life’s economic goals through a massive margin.
The following illustration will show that the timing of funding may be very important in case you plan to make the maximum out of the PPF investment. Take a look:
First, suppose you open the PPF account on 1st April 2019 (on the modern-day price of hobby of eight% in line with annum and the maximum deposit restriction at Rs 1.5 lakh in keeping with annum) and deposit Rs eighty,000 at the day of establishing the account, Rs 40,000 on 4th August 2019 and Rs 30,000 on 10 November 2019.
The PPF account interest rate is calculated best at the remaining day of the financial year. So it does not depend while you deposit the amount all through the monetary yr. The hobby earned will mirror to your passbook handiest on or after the closing day of the financial year PPF account most restriction in step with 12 months alert: You might not earn interest in this deposit
If you get your PPF passbook up to date before the remaining day of the economic year, it’s going to only replicate the deposited quantity within the year.
Now, deliberating the above examples, check how the interest fee may be calculated:
– The first funding of Rs eighty,000 completed on the primary day of the brand new economic 12 months (April 1, 2019) will earn hobby for the entire year.
– The 2d deposit of Rs forty,000 will earn interest best from August till March (round 8 months).
– The third deposit of Rs 30,000 will earn hobby from December to March best (Four months).
– The interest earned within the first or may be calculated by the usage of the easy interest formulation we learned in faculties: “Principle x Time x Rate of Interest/100”.
The time in terms of 12 months in the 3 cases can be 12/12 = 1 year; 8/12 = 2/3 12 months; and four/12=1/three year respectively. The interest you may earn can be:
1. Rs eighty,000 x 12/12 x eight/100 = Rs 6400
2. Rs forty,000 x eight/12 x 8/one hundred = Rs 2133.33
3. Rs 30,000 x 4/12 x eight/one hundred = Rs 800
Thus the full interest earned on your PPF deposit within the 12 months might be = Rs 6400 + Rs 2133 + Rs 800 = Rs 9333.
However, in case you deposit the entire Rs 1,50,000 (Rs eighty,000 + Rs 40,000 + Rs 30000) on the primary day of the financial 12 months, the interest charge earned via you’ll be equal to Rs 1,50,000 x 12/12 x eight/100 = Rs 12,000.
This interest quantity is brought on your overall deposit within the next monetary yr for the calculation of the whole hobby earned and so on in next years.
From the above illustration, it’s far clean that making an investment within the PPF account in the very starting of the financial year can give higher returns.
Are you a Credit card, Debit, ATM, Internet Banking fraud victim? The government is working with the Reserve Bank of India (RBI) to look at frauds under Rs 1 lakh. Besides this, the government has additionally prepared a Financial Data Protection Bill. This record was shared inside the Rajya Sabha by way of Union IT Minister Ravi Shankar Prasad.
The minister said the authorities are running with the Reserve Bank (RBI) to inspect cases of economic frauds involving amounts which can be under Rs 1 lakh, PTI reported. A Financial Data Protection bill has additionally been drafted to deal with issues associated with records robbery, consisting of from social networking websites, Prasad stated within the Upper House.
A gift, the central bank alongside different creditors is tracking cases of frauds associated with credit, debit and ATM cards and internet banking concerning over Rs one lakh. Prasad stated, “The facts of India cannot be stolen and strict action could be taken against any type of fraud,” Prasad stated at some stage in the Question Hour while responding to Supplementary queries.”
The Union minister also noted that information on hacking located earlier than the Upper House is considerably associated with monetary fraud. The RBI is already looking into instances of frauds involving transaction above Rs one lakh. “We are running with the RBI to investigate frauds related to transaction under Rs one lakh amount,” he stated.
Responding to a supplementary question on steps taken to lessen hacking of records from social networking websites, the Union minister stated, “Today, India will not bow down to the new imperialism. We took the movement in opposition to Facebook the instant we acquired the grievance.”