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Is it wise to remain invested in PPF account without contribution after 15-year lock-in?

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2 years ago

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If the matured amount in a PPF account after 15-year period is kept without further annual contribution. Will it not be a better proposition looking at the fact that the interest earned is attractive and tax free too. Is it mandatory to close the PPF account? Whether the subscriber is permitted to keep the balance in PPF account without any further annual contribution? If yes, does one earn the interest on the account balance annually at the PPF rate? Is such interest income exempt usual PPF interest? If answers to the two Q are in affirmative, why one should close the account and withdraw the amount from PPF account?

Answer: A PPF account holder has two option after the same has matured on completion of 15 years. Either you can extend the account for another block of five years “with contribution” option by submitting Form-4. Or you can retain your account after maturity without making any further deposits for any period. Please note that the balance in your account will continue to earn interest at the rate applicable to the Scheme from time to time. You can make maximum one withdrawal every year of any amount. Once the account is continued without deposits for more than a year, the account holder shall not have the option again to continue the account with deposits. This option has to continue the account with balance has to be exercised within one year from completion of five years.

The rate at which interest will be paid to you is the same under both the options. The interest earned under both the option is tax free in your hands. So in case you do not need the money immediately, it certainly makes sense for you to continue the account without contributing as long as you want. You can withdraw the either partial or full any time but only once in a year. The decision whether to let the money remain in the PPF account after its maturity is not determined only because it earns higher tax free returns. There are other considerations like need of the money or alternative avenues for deployment of the money at higher after tax returns etc. which ultimately decide whether one retains the money in PPF account after maturity or he withdraws it on maturity.

(Balwant Jain is a tax and investment expert and can be reached on jainbalwant@gmail.com and @jainbalwant on his twitter handle)

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S&P/TSX composite up more than 100 points, U.S. stock markets mixed

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1 day ago

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October 16, 2024

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TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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Economy

S&P/TSX up more than 200 points, U.S. markets also higher

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6 days ago

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October 11, 2024

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TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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Economy

S&P/TSX composite little changed in late-morning trading, U.S. stock markets down

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1 week ago

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October 10, 2024

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TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.

The S&P/TSX composite index was up 0.05 of a point at 24,224.95.

In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.

The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.

The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.

The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.

This report by The Canadian Press was first published Oct. 10, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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