7/28/2019 PPF & ELSS(MF)

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Public Provident Fund (PPF)

Returns: Interest 8.8% p.a. (compounded annually), w.e.f. 01-Apr-2012, is credited to the PPF account at theend of each financial year.

Tenure for investment: 15 years from the date of initial investment with a block of 5 years there-after uptoa max of 30 years incl. 15 years.

Maturity: The PPF account matures after 15 years. One can then exercise on option of continuing the accountfor an additional block of 5 years or close it.

Loan: The first loan can be taken in the 3rd financial year from the date of opening of the account, or up to 25%of the amount at credit at the end of the first financial year. The facility can be availed of any before expiry of 5

years from the end of the year in which the initial subscription was made. The loan is repayable either in

Lumpsum or in convenient instalments numbering not more than 36. The rate of interest charged on loan taken

by the subscriber of a PPF account on or after 01.12.2011 shall be 2% p.a. However, the rate of interest of 1%p.a. shall continue to be charged on the loans already taken or taken up to 30.11.2011.

Withdrawal: A withdrawal is permissible every year from the 7th financial year of the date of opening of theaccount, of an amount not exceeding 50% of the balance at the end of the 4th proceeding year or the year

immediately proceeding the year of the withdrawal, whichever is lower, less the amount of loan if any.

PPF calculator:http://www.investmentkit.com/government/ppf-calculator.shtml

Click on the above link to calculate PPF

Investments in PPF as well as Equity Linked Saving Schemes (ELSS) gives you tax deduction benefits.

But the difference between the two is that equity tends to be the best performing asset class over a long

period of time. Compared to that, if you look at PPF, it is giving you a very handsome return today, but

that becomes very disappointing in relation to inflation. Any investment of this kind should be expected

to beat inflation; it should be able to beat the fixed income return available. Equity can be a risky

investment if you're investing for a short period of time, but with time on your side, equity is extremely

rewarding.

Reliance Tax Saver (ELSS) Fund (G)http://www.moneycontrol.com/mutual-funds/nav/reliance-tax-saver-elss-fund/sip-calculator-

MRC101.html

Go to the above link. Put amount you want to invest. Say 2000rs for eg. Put from date as 2009-11-23

and to date as 2012-11-23 that would make 3years. The CAGR that you will get will be your average

return for 3 years. Read that page carefully and if you find something that you dont understand then

call me.

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