What to do with PPF?

[anantj]

About 30-35 years ago, my father started a PPF account in my home town in my name. The PPF a/c (Account#1) was being invested in continuously except for a few missed investments in between. We paid the "fine" for the missed years, and the PPF account is active and regularized. This is in SBI.

About 8-9 years ago, he urged me to open another PPF a/c in my child's name (Account#2 - Not in SBI). I've been investing the full 1.5 L each year in this new a/c and about 5K in the older PPF a/c (Account#1)

Account#1 now has a corpus of a few 10's of lacs, and Account#2 has a few lacs.

I've been ignoring them and haven't "extended" Account#1 explicitly or done anything with it. What should I do with these accounts and the funds in them? Account#2 obviously, I'll continue till my child matures and then transfer it to their name.

What about Account#1? Should I continue with it, or should I close it? Can I include these funds as TRV to get some good banking services (wealth management or some such) from SBI? I was also considering transferring the SBI PPF a/c to ICICI but haven't done it yet.

Please advise and share your suggestions on how to best proceed with this.

 

[hender]

About 30-35 years ago, my father started a PPF account in my home town in my name. The PPF a/c (Account#1) was being invested in continuously except for a few missed investments in between. We paid the "fine" for the missed years, and the PPF account is active and regularized. This is in SBI.

About 8-9 years ago, he urged me to open another PPF a/c in my child's name (Account#2 - Not in SBI). I've been investing the full 1.5 L each year in this new a/c and about 5K in the older PPF a/c (Account#1)

Account#1 now has a corpus of a few 10's of lacs, and Account#2 has a few lacs.

I've been ignoring them and haven't "extended" Account#1 explicitly or done anything with it. What should I do with these accounts and the funds in them? Account#2 obviously, I'll continue till my child matures and then transfer it to their name.

What about Account#1? Should I continue with it, or should I close it? Can I include these funds as TRV to get some good banking services (wealth management or some such) from SBI? I was also considering transferring the SBI PPF a/c to ICICI but haven't done it yet.

Please advise and share your suggestions on how to best proceed with this.

As you are aware PPF is EEE for taxation purpose.
Think carefully the option you have , before moving large amount.

New FY is coming with new Tax Slabs, better you discuss with a Practicing CA, in line with your present requirement and future needs.

 

[anantj]

As you are aware PPF is EEE for taxation purpose.
Think carefully the option you have , before moving large amount.

New FY is coming with new Tax Slabs, better you discuss with a Practicing CA, in line with your present requirement and future needs.

Yes, I'm aware that it is EEE. I don't have any immediate requirement (except perhaps investing in equities, given the recent fall in the equities market).
I'm not sure if leaving the funds in the PPF account (at least for Account#1) is the right way forward. Also, I am not sure of the implication of the recent changes in the PPF account rules (primary and secondary account).

 

[hender]

Yes, I'm aware that it is EEE. I don't have any immediate requirement (except perhaps investing in equities, given the recent fall in the equities market).
I'm not sure if leaving the funds in the PPF account (at least for Account#1) is the right way forward. Also, I am not sure of the implication of the recent changes in the PPF account rules (primary and secondary account).

Priority you have to decide, CA can guide as per your Financials and Taxation purpose.
Don't know you follow Assets allocation method, or any other method.
How's your past experience!
Are you ready for a Roller Coaster 🎢 ride in equity compare to PPF.

All the best 👍.

 

[2025]

About 30-35 years ago, my father started a PPF account in my home town in my name. The PPF a/c (Account#1) was being invested in continuously except for a few missed investments in between. We paid the "fine" for the missed years, and the PPF account is active and regularized. This is in SBI.

About 8-9 years ago, he urged me to open another PPF a/c in my child's name (Account#2 - Not in SBI). I've been investing the full 1.5 L each year in this new a/c and about 5K in the older PPF a/c (Account#1)

Account#1 now has a corpus of a few 10's of lacs, and Account#2 has a few lacs.

I've been ignoring them and haven't "extended" Account#1 explicitly or done anything with it. What should I do with these accounts and the funds in them? Account#2 obviously, I'll continue till my child matures and then transfer it to their name.

What about Account#1? Should I continue with it, or should I close it? Can I include these funds as TRV to get some good banking services (wealth management or some such) from SBI? I was also considering transferring the SBI PPF a/c to ICICI but haven't done it yet.

Please advise and share your suggestions on how to best proceed with this.

Don't close. Use them as a better option than FD. U can use them as your emergency fund (backup) also. I hope u aware that u can withdraw upto 35-40% of amount anytime without paying any premature penalty (as partial withdrawal) unlike FDs. Tax treatment is better. Interest is somehow lagging nowadays.

 

[JigmeKhesar]

About 30-35 years ago, my father started a PPF account in my home town in my name. The PPF a/c (Account#1) was being invested in continuously except for a few missed investments in between. We paid the "fine" for the missed years, and the PPF account is active and regularized. This is in SBI.

About 8-9 years ago, he urged me to open another PPF a/c in my child's name (Account#2 - Not in SBI). I've been investing the full 1.5 L each year in this new a/c and about 5K in the older PPF a/c (Account#1)

Account#1 now has a corpus of a few 10's of lacs, and Account#2 has a few lacs.

I've been ignoring them and haven't "extended" Account#1 explicitly or done anything with it. What should I do with these accounts and the funds in them? Account#2 obviously, I'll continue till my child matures and then transfer it to their name.

What about Account#1? Should I continue with it, or should I close it? Can I include these funds as TRV to get some good banking services (wealth management or some such) from SBI? I was also considering transferring the SBI PPF a/c to ICICI but haven't done it yet.

Please advise and share your suggestions on how to best proceed with this.

for utilising the PPF that's matured, you'll know it better than most.

these accounts don't contribute to TRV as it's government business for banks which they provide only because they're mandated to. the banks don't get any benefit out of the funds like your deposits.

 

[anantj]

Priority you have to decide, CA can guide as per your Financials and Taxation purpose.

PPF withdrawal will not be taxed right? If you mean tax on equities, I'm ready for LTCG (Not that I have an option there :-D). But yes, I'll consult a CA

Don't know you follow Assets allocation method, or any other method.

I do not. I don't really have a method. 70% of my investments are in equities (Direct and through MF). The rest in EPF and PPF

How's your past experience!

Past experience with equities? My equity portfolio, untile a couple of months ago, had an IRR of ~18% over the past 20 years.

Are you ready for a Roller Coaster 🎢 ride in equity compare to PPF.

Well yes. I don't trade and am a long term investor. But also, I'll not put 100% of the PPF in equities. Will also allocate some amount to Debt.

All the best 👍.

Thank you 🙂

 

[anantj]

Don't close. Use them as a better option than FD. U can use them as your emergency fund (backup) also. I hope u aware that u can withdraw upto 35-40% of amount anytime without paying any premature penalty (as partial withdrawal) unlike FDs. Tax treatment is better. Interest is somehow lagging nowadays.

Will it be considered a premature withdrawal even though it is more than 15 years old?

 

[anantj]

for utilising the PPF that's matured, you'll know it better than most.

these accounts don't contribute to TRV as it's government business for banks which they provide only because they're mandated to. the banks don't get any benefit out of the funds like your deposits.

Got it. That makes sense

 

[cardio_guycardio_guy is verified member.]

Withdraw account 1 if it is mature. Use it to pay off any loan if you have.

 

[hender]

PPF withdrawal will not be taxed right? If you mean tax on equities, I'm ready for LTCG (Not that I have an option there :-D). But yes, I'll consult a CA

I do not. I don't really have a method. 70% of my investments are in equities (Direct and through MF). The rest in EPF and PPF

Past experience with equities? My equity portfolio, untile a couple of months ago, had an IRR of ~18% over the past 20 years.

Well yes. I don't trade and am a long term investor. But also, I'll not put 100% of the PPF in equities. Will also allocate some amount to Debt.

Thank you 🙂

Champion 🏆 asking or taking test of innocence member like me.

A veteran, daring by nature and seasoned Equity investor, who have seen all sorts of fall 2008, 2020 etc, and getting IRR of 18%.

क्षमा करें मान्यवर। 🙏🙏
सूरज को दीपक🙌 क्या रोशनी दिखाएगा |

 

[hender]

Will it be considered a premature withdrawal even though it is more than 15 years old?

You have to check with Bank, it's 15+5+5 and so on. (Original+Extended+Extended),
Suggestion: Take full interest on 31 March 2025, than use.

 

[2025]

Will it be considered a premature withdrawal even though it is more than 15 years old?

Why not. Because u will be continuing for +5 years. I think u have to tell them before completion of 15 years (otherwise it could be an issue). Continuation will be in block of 5 years. You can withdraw some amount as per previous rule. If you are still doubtful then take out some money while continuing for 5 more years.

Withdraw account 1 if it is mature. Use it to pay off any loan if you have.

If loan is then then its always better to pay off.
Otherwise i would suggest to continue as the block period reduced from 15 >>> 5 years for him, and every time it will be 5 years only now onwards.

 

[anantj]

Withdraw account 1 if it is mature. Use it to pay off any loan if you have.

No loans. I'm not sure about the maturity and that's one of my questions. Any suggestion on how can we determine if a PPF a/c is matured?

 

[anantj]

Champion 🏆 asking or taking test of innocence member like me.

A veteran, daring by nature and seasoned Equity investor, who have seen all sorts of fall 2008, 2020 etc, and getting IRR of 18%.

क्षमा करें मान्यवर। 🙏🙏
सूरज को दीपक🙌 क्या रोशनी दिखाएगा |

I did not get the sarcasm? My question was definitely genuine

 

[anantj]

You have to check with Bank, it's 15+5+5 and so on. (Original+Extended+Extended),
Suggestion: Take full interest on 31 March 2025, than use.

Got it. I'll check with them. I suspect it is matured as it is over 30 years old.
Very good advice on doing this after 31st March.

 

[anantj]

Why not. Because u will be continuing for +5 years. I think u have to tell them before completion of 15 years (otherwise it could be an issue). Continuation will be in block of 5 years. You can withdraw some amount as per previous rule. If you are still doubtful then take out some money while continuing for 5 more years.

I might have missed it. I thought I mentioned that Account#1 is over 30 years old

If loan is then then its always better to pay off.
Otherwise i would suggest to continue as the block period reduced from 15 >>> 5 years for him, and every time it will be 5 years only now onwards.

I don't have any loans. I managed to close them all in the last 2 years. Can you explain more on the block period? I did not understand who the block period will be for?