I’ve had an SBI PPF account for more than 14 years. Last year on behalf of my 5-year-old son, I started a PPF account (with HDFC Bank) and invested Rs 1.5 lakh in the account in addition to the Rs 1.5 lakh I had already invested in my own PPF account. I now assume the PPF account of a minor gets blended with the guardians. And what occurs to the account with HDFC? Can I make a withdrawal and shut the account? Can I get this Rs 1.5 lakh tax advantage or interest on the invested amount or both if I proceed with the consideration?
In a financial year, the quota for deposits to individual self-account and minor account(s) to which one guardian is currently limited to Rs 1.5 lakh. Interest income and tax breaks are also therefore available on the basis of Rs 1.5 only. The bank should preferably refuse any transaction above and above this level. To have the additional Rs 1.5 lakh transaction reversed into your account, get in touch with HDFC Bank. As you are required to declare old PPF accounts on the PPF form for opening the minor account(s), and for the same the bank has no obligation. Closing this account is advised. In the next financial year and you can open a small account and make sure the deposit of a minimum of Rs 500 and a cumulative maximum of Rs 1.5 lakh have done in both accounts.
Through SIPs, PPF and life insurance, although I got a job in 2015, I have been a consistent investor. I have saved enough to take complete benefit of the prospects of Section 80C. I am now receiving nearly Rs 10 lakh a year and my annual savings by SIPs are Rs 1.2 lakh, Rs 14,000 in life insurance and the remaining balance for PPF (including EPF). Over the next 12-15 years, where and how do I invest for wealth accumulation?
Although many of us start investing in a tax-saving scheme, one can inevitably move to a goal-oriented approach and relate all investments to various objectives. You should have a moderately aggressive risk profile because you are young yet. Is it realistic to imagine making an allocation of 60-70 percent in equity and 30-40 percent in debt, with your time period of 12-15 years? What you have to do here is having two different fixate categories: retirement income and other priorities. With a 60:40 equity debt allocation, the PPF + EPF and equity funds can appear to be part of the retirement investments. So in two large-cap index funds, and one or two flexi-cap funds, you can have SIPs. If an additional amount is to be parked in debt to achieve compliance with the proposed allocation, so consider having additional VPF (or PPF) contributions. Retain the equity-debt allocation at 70:30 for the other priorities portfolio and intervene in one flexicap fund and one money market fund. Revamp after a few years of accumulation, at least once every year.