How Long Should I Continue PPF Account

July 7, 2021 By Damodhar C Off
Parents begin to save for their children to stabilize their children’s future financially. The Public Provident Fund (PPF) account is one of the investment options to choose from. Most parents are opening an account. But over time, that is likely to change. Completely discontinued for a few years. Opening a PPF account for children is a wonderful idea. However, in order for your children to reap the full benefits, it is important to make sure that the investments are consistent and that the account is fully maintained over a long period of time.
Why stability with PPF account?
Example 1: Suppose you open a PPF account for your 10 year old baby. If you open an account with a monthly contribution of 500 and continue for 15 years, you will receive $ 160,000 at 7% interest for 25 years. By then, if he completes the loan, joins the job and maintains the account for another 35 years, he will be able to accumulate Rs 27,86,658 with the same 7 per cent interest rate. The total investment period here is 50 years.
Example 2: Suppose a child completes 22 years of service and joins the first job. At the time of joining the job, if she had invested p 1,000 ppf per month instead of ₹ 500 in her 22 years, she would not have accumulated a total of 7 23,72,635 at the time, with an interest rate of 7 per cent. Will be 60 years. The investment period here is 38 years.
Investments in the second case doubled compared to the first example. However, they were able to raise a small amount. It is the effect of compound interest. That’s why experts say you should invest as soon as possible. In the first example, despite the small investment, the investment period is longer. That is why the compound has accumulated a large amount of interest.
Things to know before opening a PPF account with a minor.
* Only one of the parents can open an account on behalf of the minor. They must be Indians.
* Must complete Guardian KYC. In addition, a small photo, proof of age (Aadhaar or birth certificate) and a check for first contribution must be provided.
* Parents can maintain an account for a minor up to the age of 18.
* Minor mother or father or Legal Guardian can invest up to a maximum of Rs. 1.5 lakh per annum towards son / child.

* If there is a PPF account in the name of the mother or father .. Up to a maximum of ₹ 1.5 lakh per annum can be invested in both accounts. With this in mind it is necessary to divide the amount invested in the account.